risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Credit risk, Liquidity risk and Concentration risk. Sustainability risks may lead to a significant deterioration in the financial profile, profitability or reputation of an underlying investment and may therefore have a significant impact on its market price or liquidity. The environmental, social, and governance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.

Global Climate Bond

Seeking impact through investment-grade global climate bonds
 

Climate change, global growth and society have already impacted, and will continue to impact, not only the world’s economic growth but also the lives of millions of people. Tackling climate change can be achived through a shift to a low-carbon economy.

Source: LOIM Research as of 31 October 2023.

climate change: environmental challenge, impact opportunity.

An estimated additional USD 700 billion1 is required each year to meet the COP212 objective to limit climate change to 2°C. A major shift in capital is required to tackle this funding gap.

Consequences of exceeding the 2°C temperature rise2 
 

Sources:
1 World Economic Forum.
2 IPCC, Carbon Brief, 2018.
3 climateforesight.eu, May 2019 (https://interactive.carbonbrief.org/impacts-climate-change-one-point-five-degrees-two-degrees/). 
For illustrative purposes only.

large opportunity set.

To help avoid these dire consequences, we see a pressing need for impact capital: to align with the Paris Agreement and UN SDGs, climate annual investment needs to almost double to USD 5.5 trillion this decade and to rise to USD 7.2 trillion in the 2030s. Not only can such investment mitigate climate damage, it can generate returns by supporting sustainable growth.  

Climate bonds are a fast-growing market segment offering investors an opportunity to create an impact without compromising investment return potential when compared to conventional bonds. What’s more, climate bonds use proceeds exclusively to fund projects aiming to mitigate or adapt to climate change.

The broadening investment universe spanning labelled green bonds (bonds that include external validation on the use-of-proceeds), and climate-aligned bonds requires a specialist investment approach to build a verifiable impact without compromising investment return potential.

what are climate bonds?

Climate bonds are conventional debt instruments whose proceeds help the world mitigate or adapt to climate change through:

  • Mitigation: low-carbon reducing and stabilising greenhouse gas emissions - e.g., renewable energy and low carbon transit.
  • Adaptation: helping communities and ecosystems adjust to new climate extremes -  e.g., resilient infrastructure and water management.
  • Similarly, the proceeds of social and sustainability bonds are used to build resilient communities and economies.


The market is broadly split into two types of investment instruments :

  • Labelled green bonds: these provide ring-fenced funding requiring external validation on the use of proceeds. These have high standards of transparency and must evidence clear positive climate impact and good impact reporting.
  • Non-labelled climate-aligned bonds: also described as non-ring-fenced funding,  their revenues are dedicated to climate-friendly sectors, requiring deep verification expertise. This type of bond can significantly broaden the investment universe.

our strategy - why invest with us?

Icons_1.png A diversified investment-grade portfolio seeking to simultaneously create a positive environmental impact and provide a higher yield to investors than a typical investment-grade portfolio, with lower turnover.
Icons_2.png Market-leading impact credentials through our partnership with MetLife Investment Management, established as one of the first asset managers dedicated to offering fixed-income strategies that target positive environmental and social impact.
Icons_3.png Outstanding reporting disciplines provide investors with significant insight into the impact of their investments across multiple discipline.
Icons_4.png Recognised expertise: including four awards from Environmental Finance (2018, 2019, 2020) and ESG Investing Awards’ Best ESG Investment Fund. 

Awards and ratings may vary without notice.

LOIM and MetLife - our partnership.

analysing opportunities.

S

 ustainable

Aligned with our purpose to support the UN SDGs and Paris Agreement on climate change

P

 ositive externalities

Positive environmental and/or social externality associated with their issuance

E

 thics & issuer conduct

Issuers must have appropriate governance, policies and operational conduct

C

 redit

Issuers must have a strong financial structure

T

 ransparent

Transparent and clear reporting and disclosure

R

 esponsible issuer

Responsible issuers with strong integrity, environmental and social standards; a clear commitment to a sustainable business model

U

 se of proceeds

Ability to determine use of proceeds to assure funded activities meet MetLife’s criteria

M

 aterial & measurable

Reporting on material and measurable environmental and social impacts

Key:

Sustainability

Credit


For Illustrative purposes only.

 

our investments explored.

investment team.

MetLife-Esther-Rulli_86x86.png
Esther Rulli, CAIA
Head of Institutional Client Group for UK & Switzerland

MetLife-Nick-Reid_86x86.png
Nick Reid
Associate
Institutional Client Group

MetLife-Jonny-Giles_86x86.png
Jonny Giles
Associate Portfolio Manager

MetLife-Richard-Petit_86x86.png
Richard Petit
Director Credit

MetLife-Jennifer-Youde_86x86.png
Jennifer Youde
Vice President Portfolio Management

MetLife-Justine-Eeles_86x86.png
Justin Eeles
Managing Director Portfolio Management

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more about our funds.

LO Funds - Global Climate Bond

Asset Class Fixed Income
Strategy Sustainable Fixed Income
Category Aggregate
Share class name ISIN Currency Date NAV
Share class name LO Funds - Global Climate Bond, (USD) N A ISIN LU1490630644 Currency USD Date 5/24/24 NAV 9.7
Past performance is not a guarantee of future results. If the funds are denominated in a currency other than that in which the majority of the investor's assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds' underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

Private credit as a catalyst for net-zero
investment viewpoints Institutional
investment viewpoints Institutional Wholesale Fixed Income Climate bonds

Private credit as a catalyst for net-zero

We provide an overview of our investment strategy and sustainability approach and highlight the achievements of the strategy’s portfolio companies during the year 2022. 

Labelled bonds: a silver lining from green debt
investment viewpoints Institutional
investment viewpoints Institutional Wholesale Fixed Income Climate bonds

Labelled bonds: a silver lining from green debt

How has the labelled fixed-income market held up in view of macro events this year? What were the areas of strength? We highlight a number of encouraging signs in the world of green debt.

Webinar | Supporting sustainability with climate bonds
LOIM tube Asset Management
LOIM tube Asset Management Institutional Consultants DB DC Insurance Official institutions Investment strategies Fixed Income Climate bonds Themes Sustainability Climate change Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers

Webinar | Supporting sustainability with climate bonds

This Q&A offers highlights from the Global Climate Bond 2022 Impact Report, with examples of the Strategy's positive environmental and social outcomes over the past year.

Towards Sustainability: LO Selection – NextGen BioTech earns the label
investment viewpoints Sustainability
investment viewpoints Sustainability Asset Management Fixed Income Convertibles Investment strategies Asia high conviction Equities Alternatives. Climate bonds DC DB Banks Wholesale Climate change Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds Endowments Covid-19

Towards Sustainability: LO Selection – NextGen BioTech earns the label

Another LOIM strategy – NextGen BioTech – has achieved the esteemed Towards Sustainability label1. This brings our total of labelled strategies to 10.

Ice cubes, burning logs and the road to net zero: Episode 4
LOIM tube Sustainability
LOIM tube Sustainability Asset Management Themes Fixed Income Investment strategies Equities Climate bonds DC DB Banks Wholesale Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds Endowments Planetary Transition Climate change

Ice cubes, burning logs and the road to net zero: Episode 4

Audiocast

The final episode of our new podcast series on ice cubes, burning logs and the road to net zero, focuses on the future of the climate transition.

Climate risk and opportunity by sector and geography
investment viewpoints Asset Management
investment viewpoints Asset Management Institutional Consultants DB DC Insurance Official institutions Investment strategies Equities Planetary Transition Fixed Income Climate bonds Themes Sustainability Climate change Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers

Climate risk and opportunity by sector and geography

The impacts of climate change are evident and are affecting financial markets. Physical risks stemming from climate change are potentially under-estimated.

important information.

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). This marketing document particularly relates to Climate Transition, a Sub-Fund of LO-Funds (hereinafter the “Sub-Fund”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds (“AIFs”) and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services. Lombard Odier Investment Managers (“LOIM”) is a trade name. 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