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Global Environmental Equity investing

January 2020

Global Environmental Opportunities

Pictet Global Environmental Opportunities is an unconstrained global equity strategy focusing on innovative businesses providing solutions to environmental challenges facing our planet.

Investing for impact

Our strategy invests exclusively in the environmental products and services industry. Already a USD2 trillion market, we expect this dynamic sector to grow 6 per cent per year.
GEO overview horizontal.png

Source: Pictet Asset Management. Data as of 31.12.2019. Please note that the strategy is benchmark agnostic; the MSCI World is not a benchmark but a reference index which serves as a proxy for global equities (other proxies such as MSCI ACWI are appropriate).

Performance that does not have to cost the planet

With our Global Environmental Opportunities strategy, investors can help safeguard the planet while retaining the prospect of long-term outperformance.

Global Environmental Opportunities -  composite performance - USD, gross of fees
Periods over 1 year are annualised
GEO perf with calendar years gross.png

Source: Pictet Asset Management. Data as of 31.12.2019. Past performance is not a guide to the future, losses may be made. Source GIPS composite report accessible here. *Partial period. The composite inception date is 30.09.2014.

More than just a climate change strategy

Central to Global Environmental Opportunities is a ground-breaking scientific framework called Planetary Boundaries. This is a model, developed in 2009 by a group of scientists at the Stockholm Resilience Centre and other leading organisations, which identifies nine of the most critical environmental dimensions - including carbon emissions (climate change), fresh water, land use and biodiversity - that are essential to maintain a stable biosphere required for human development and prosperity (click here to find out more on our website Mega).

We use this framework to identify firms with the strongest environmental credentials across their entire value chain from the extraction of raw materials to manufacturing processes, distribution and transport, product use, and disposal and recycling.

Demonstrable impact...

Using the Planetary Boundaries framework to compare Pictet Global Environmental Opportunities strategy versus MSCI World Index

PB_impact_June2019.png

Source: Pictet Asset Management, NEOSIS, 30.06.2019

As the chart above shows, the final Global Environmental Opportunities portfolio achieves a significantly more positive environmental impact than that of a typical global equity strategy across all nine dimensions, particularly in climate change. For example, as shown above in the top left chart, carbon dioxide emissions of companies in our portfolio stand at 454 tonnes of CO2 equivalent per million dollar of annual revenue (tCO2 eq/mn$), compared with 1,948 tonnes for the MSCI World index.

Investment philosophy

We invest in specialised companies that provide solutions to the planet’s environmental challenges, as well as using resources efficiently, minimising their waste and limiting other adverse impacts on the environment. We believe these companies will outperform the global equity market over the long run.

Investment process

  1. The investment managers use a proprietary screening tool, based on the Planetary Boundaries, to identify companies with a low environmental footprint across nine dimensions: climate change, oceanic acidification, ozone depletion eutrophication, fresh water, land use, biodiversity, aerosols and chemical pollution. 
  2. They then conduct in-depth fundamental analysis to isolate those providing specialised products and services designed to reverse ecological degradation and help others improve their environmental footprint. They pay close attention to valuation, business franchise, and management quality criteria. ESG scoring using in-house analysis is embedded.
  3. The result is a concentrated portfolio of around 50 stocks - each investment combining an attractive risk-return profile with strong environmental credentials.

Investment team

Our Global Environmental Opportunities strategy has been developed by our pioneering thematic equities team who manage around USD 40 billion in AUM. We launched our first environmental strategy, Pictet Water, in 2000. 

Explore below to find out more about Global Environmental Opportunities and the key investment professionals managing the strategy. You can also click below to access a webcast from the team.


Pictet Global Environmental Opportunities - Impact Investing moves centre stage

webinar