The Global View

Q&A – The F&C Global Climate Opportunities Fund

tn_jason_hollands.gifThe F&C Global Climate Opportunities Fund was launched in September to invest in companies positioned to develop leading technologies, products and services aimed at mitigating or adapting to the effects of climate change.

Greenbang interviewed the Fund’s Jason Holland – director and head of group communications…

GB: Tell us more about the Fund…

Jason: It is much more than a simple alternative energy fund. The Fund has nine clear investment themes which represent a holistic approach to the problems posed by climate change, not only addressing the development of alternative energy industries but also identifying the broader technologies, support systems and advanced materials that will underpin emissions reductions. The portfolio also looks at the long-term adaptation that will be prompted by climate change, ranging from necessary infrastructure to acclimatisation measures in areas such as agriculture and health.

Divided in three different segments, the investment themes are:

Mitigation: Alternative Energy, Energy Efficiency, Sustainable Mobility, Waste, Advanced Materials and Forestry & Agriculture

Adaptation: Water and Acclimatisation

Supporting services: including carbon trading, consultancy and other related areas.

The portfolio co-managers, Terry Coles and Sophie Horsfall, leverage the resources of F&C’s large Governance and Sustainable Investment (GSI) team which includes leading climate change expert, Vicki Bakhshi, a former senior researcher on the Stern Review on the Economics of Climate Change and former climate change policy in the 10 Downing Street Policy Unit. The team advise the fund managers on policy developments, and on how proposed additions to the portfolio fit within the nine themes.

You recently said that high oil prices would push investment in alternative technologies – where are you seeing that investment and how do you back this up?

– I will pass this one over to Terry Coles – [Terry, we’d love to hear from you ;)]

What’s your view on carbon offsetting?

I would encourage you to read a paper we wrote on the topic of carbon offsetting last June which explores the benefits and pitfalls:

http://www.fundnets.net/fn_filelibrary//file/co_gsi_publications_guide_to_carbon_offsetting.pdf

In very simple terms we believe the priority for companies must be to first reduce emissions and then offset the remainder once they have taken action to cut emmissions.

Where did investors flock to in 2007?

Not sure if you mean in terms of stocks or our funds? If the latter, 2007 saw a very significant increase in fund flows into more general ethical funds (which have a strong green dimension), reflecting similar trends elsewhere in the economy (eg. the rise of green consumerism) which bodes well for the future. Investment returns have also been good from such funds, so we see this as a very sustainable rise in interest.

Towards the latter part of the year a number of fund management companies, following our lead, have launched climate change themed funds. Here we expect early interest to come primarily from the institutional market as private investors and their financial advisers await to see the investment track records being developed.