ESG Unlocked: Europe out in front - Page 17

Sponsored by designed to help investors reflect the financial risks of climate in their portfolio and contribute to the solutions , while taking advantage of the opportunities presented by the transition to a low carbon economy . JPCT * is designed to be in line with the Climate Transition Benchmark ( CTB ), which requires at least a 30 % reduction in carbon emissions and at least a 7 % year-on-year rate of self-decarbonisation .
To meet these targets , our investment framework seeks to identify companies that are best positioned to benefit from the transition . With this approach , we have created a portfolio that achieves a meaningful reduction in carbon intensity relative to a traditional index . Importantly , we do this without applying sector exclusions , as we want to keep sectors in line with the index . Instead , we achieve the reduction in carbon intensity through individual security selection , investing in companies leading the way in the transition and avoiding those that will lose out as a result .
Our research suggests there are three key ways companies can prepare themselves for the transition to a low-carbon world . Analysis of company performance against these three key pillars forms the basis on our framework ( see graphic ).
Using alternative data to broaden the opportunity set
Traditional sources of corporate information , such as company reports and analysis from third-party data providers , are useful in
Carbon Transition Framework : three key pillars
Managing emissions
Site emissions Reduce direct emissions and shift towards greener forms of energy
Consumer emissions & opportunities Benefit from a shift in consumer demands towards low carbon alternatives
analysing whether companies are managing their businesses sustainably . However , this data can be patchy . Many companies do not report their emissions , and it is challenging to uncover the companies creating the innovative solutions and technologies required for a low carbon world .
To address this issue , we rely on our expertise in artificial intelligence and big data , and a proprietary technology tool , ThemeBot . This tool uses natural language processing to screen more than 10,000 stocks globally , and rapidly analyses hundreds of millions of data sources – such as news articles , company reports , earnings transcripts , and broker research – to identify stocks with the highest exposure to a theme .
For our carbon transition framework , we have selected a number of innovative climate solutions that will be required to spur change towards a low-carbon world .
Managing resources
Electricity management Reduce indirect GHG emissions from the usage of electricity
Water management Improve the sustainability of water flow management
Waste management Reduce waste materials , both hazardous and non-hazardous
Managing climaterelated risks
Physical risk Mitigate impact of physical risks from extreme weather conditions
Reputational risk Improve climate stewardship
We use ThemeBot to identify companies involved in areas such as renewable energy , sustainable food and agriculture and sustainable transport , as well as companies focusing on energy efficiency or offsetting their carbon footprint .
Based on this framework , we evaluate companies to identify those most transitionready . We then take overweight positions in companies taking the necessary steps to ensure they are reducing carbon emissions . We go underweight in those companies that are most at risk as they are failing to prepare their businesses for the transition to a low carbon economy .
JPMCT * provides exposure to a diversified portfolio of approximately 400 equities , globally , was launched in November 2020 and is categorised as Article 9 under the Sustainable Finance Disclosure Regulation ( SFDR ).
FOR BELGIUM ONLY : * Please note the ETF marked with an asterisk (*) in this page are not registered in Belgium and can only be accessible for professional clients . Please contact your J . P . Morgan Asset Management representative for further information . The offering of Shares has not been and will not be notified to the Belgian Financial Services and Markets Authority ( Autoriteit voor Financiële Diensten en Markten / Autorité des Services et Marchés Financiers ) nor has this document been , nor will it be , approved by the Financial Services and Markets Authority . This document may be distributed in Belgium only to such investors for their personal use and exclusively for the purposes of this offering of Shares . Accordingly , this document may not be used for any other purpose nor passed on to any other investor in Belgium .
This is a marketing communication and as such the views contained herein do not form part of an offer , nor are they to be taken as advice or a recommendation , to buy or sell any investment or interest thereto . It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested . Past performance is not a reliable indicator of current and future results . There is no guarantee that any forecast made will come to pass . Shares or other interests may not be offered to or purchased directly or indirectly by US persons . The latest available Prospectus , the Key Investor Information Document ( KIID ), any applicable local offering document and sustainability-related disclosures are available free of charge in English from your J . P . Morgan Asset Management regional contact or at www . jpmorganassetmanagement . ie . A summary of investor rights is available in English at https :// am . jpmorgan . com / lu / investor-rights . J . P . Morgan Asset Management may decide to terminate the arrangements made for the marketing of its collective investment undertakings . Units in Undertakings for Collective Investment in Transferable Securities (“ UCITS ”) Exchange Traded Funds (“ ETF ”) purchased on the secondary market cannot usually be sold directly back to UCITS ETF . Investors must buy and sell units on a secondary market with the assistance of an intermediary ( e . g . a stockbroker ) and may incur fees for doing so . In addition , investors may pay more than the current net asset value when buying units and may receive less than the current net asset value when selling them . Our EMEA Privacy Policy is available at www . jpmorgan . com / emea-privacy-policy . In Switzerland , JPMorgan Asset Management ( Switzerland ) LLC , Dreikönigstrasse 37 , 8002 Zurich , acts as Swiss representative of the funds and J . P . Morgan ( Suisse ) SA , Rue du Rhône 35 , 1204 Geneva , as paying agent of the funds . JPMorgan Asset Management ( Switzerland ) LLC herewith informs investors that with respect to its distribution activities in and from Switzerland it receives remuneration which is paid out of the management fee as defined in the respective fund documentation . Further information regarding this remuneration , including its calculation method , may be obtained upon written request from JPMorgan Asset Management ( Switzerland ) LLC . This communication is issued in Europe ( excluding UK ) by JPMorgan Asset Management ( Europe ) S . à r . l . and in the UK by JPMorgan Asset Management ( UK ) Limited , which is authorised and regulated by the Financial Conduct Authority .
ESG Unlocked : Sustainable Revolution In Full Swing October 2022 17