Shifting to a net-zero investment portfolio

Investors have a big role to play in the fight against climate change by limiting the carbon footprints of their portfolios in line with the goals of the Paris Agreement. Many investors’ ultimate aim is for their portfolio to achieve net-zero carbon emissions. We can’t tackle climate change, but that should not stop us from doing what we can do. It is already possible to reduce your portfolio’s carbon footprint significantly right now. What are the steps towards a net-zero portfolio?

There is no single predefined way to design a net-zero strategy. Your existing portfolio, objectives, expectations and restrictions are all important considerations. “The starting point is to consider what your goals are – whether you want to move to net zero, and by when,” says Edith Siermann, Head of Fixed Income Solutions and Responsible Investing at NN Investment Partners. “In doing so, you also need to think about how this is going to impact your other goals, such as your risk-adjusted return objectives and portfolio diversification, while taking into account issues such as accounting and taxation rules and restrictions”.

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