GMO has launched a new strategy focusing on emissions and climate change.

GMO says the new Horizons Investment Fund looks to address emissions risk and mitigate climate change by seeking exposure to green products and services. The fund is designed to deliver the following benefits for investors:

• Climate Transition Risk Reduction: The fund aims to reduce total portfolio emissions, utilizing GMO’s proprietary research into emissions risks embodied in company value chains. GMO’s Indirect Emissions Model addresses the shortcomings of reported scope 3 data, allowing the portfolio to target 50% less total emissions than the MSCI ACWI ex Fossil Fuels Index.

• Exposure to Climate Opportunities: The fund targets green revenues of at least three times higher than the benchmark, currently 27% for the portfolio vs. 9% for the benchmark, leveraging a green revenue data set that captures a wide range of green products and services across the investable universe.

George Sakoulis, Head of Investment Teams and Lead Portfolio Manager on the GMO Horizons Strategy, said, “We believe Horizons’ dual objective of reducing total portfolio emissions and increasing exposure to climate opportunities is a unique and comprehensive investment solution in the sustainability space. The fund represents a low-cost systematic alternative to passive equity investment, avoiding the industry concentration risks and unintended factor exposures found in other offerings in the market.”

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