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, Operational risk and risks related to asset safekeeping and Model 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.

glossary.

TargetNetZero Fixed Income

Rethinking a core debt allocation aligned with net zero

A diversified credit strategy to invest in decarbonisation, aiming for low tracking error against mainstream benchmarks with materially less greenhouse gas emissions to reconcile climate and investment objectives.

$4.5trillion

annual worldwide investment
in clean energy needed by 2030 to limit global
warming to 1.5°C¹

90 %

of global greenhouse gas emissions covered
by net-zero targets²

zero

carbon emissions required by 2050 to contain global warming within 1.5°C

why invest?

1

a core allocation
The TargetNetZero strategies provide investors with core exposure that aims for low tracking error and to match mainstream benchmarks while being aligned with the Paris Agreement’s target to limit global warming to 2°C or below

2

diversified across sectors
We prudently invest across all sectors and geographies in companies that pursue credible decarbonisation strategies and construct diversified portfolios with little to no style biases

3

turning down the temperature
Powered by LOIM’s proprietary Implied Temperature Rise (ITR) tool, we fully own, control and understand the decarbonisation metrics used to construct our portfolios without relying on external measurements or scoring and applying our own stringent credibility assessments of companies’ targets

4

resilient and risk-controlled
Taking a pragmatic and risk-controlled approach to climate-mitigation investing means our TNZ portfolios are designed to address sustained periods of negative sentiment on the transition and are resilient to sector rotations

5

a building block
Our approach is a robust investment response to the debate around the opportunity cost of investing for the transition. We combine credit convictions with decarbonisation alignment to support financial and climate objectives.

a temperature score to look ahead.

Our forward-looking ITR tool analyses a company’s net-zero alignment and translates the findings into an intuitive metric expressed in degrees Celsius. This is done by comparing the historical and projected emissions of a company to the carbon budget allocated for its sector and region to remain below 2°C of global warming (2.5°C for emerging markets).

It considers whether the projected emissions of a company are increasing, flat or decreasing and, if the latter, determines if they are falling quickly and credibly enough to meet the Paris Agreement goals. The resulting ITR scores tell us what level of global warming would result if every actor in the economy were managing its emissions with the same level of ambition as the considered company or portfolio.

LOIM pioneered creating its proprietary ITR in 2019 and our tool has been recognised as a leading metric by the Portfolio Alignment Team, which is linked with the Taskforce on Climate-related Financial Disclosures (TCFD), in 2020. As our approach evolves, our methodologies are aligned with, and have been assessed in relation to, the framework presented by the TCFD and the Glasgow Financial Alliance for Net Zero (GFANZ).

degrees of decarbonisation.

Our ITR tool uses the language of temperature (rather than low emissions) to better align with the Paris Agreement objectives. We use it to find rapidly decarbonising firms globally and across sectors, including in hard-to-abate sectors where decarbonisation is most needed.

ITR enables us to:

Translate emissions across
diverse companies and sectors
into a single temperature score

Target forward-looking decarbonisation
that relates to the real economy
compared to a low carbon approach today

Aim to materially
reduce greenhouse gas emissions
faster than the benchmark

Identify transition
opportunities across the broad economy
and difficult-to-decarbonise industries
in an unbiased way

are your investment skills fit for net zero?

Play our TargetNetZero simulator to see if you can cool your portfolio temperature from 3°C to 1.5-2°C.

Explore sectors by industry and pick companies whose carbon performance aligns with the Paris Agreement.

See how your portfolio scores, check your place on the leaderboard, share your result and compete with friends and colleagues for the coolest portfolio temperature.

Ready? It’s time to target net zero.

play our TargetNetZero simulator

our investment approach.

Our TNZ fixed income strategies invest in investment-grade (IG) corporates, with the ability to build opportunistic high-yield (HY) exposures, depending on the region. We build our portfolios systematically through a weighting scheme and enhance the strategy through active management.

LOIM’s weighting scheme selects issuers within sectors according to financial, ESG and ITR metrics. We favour or penalise companies by increasing or decreasing their weight within the portfolio according to how they perform on these criteria. Adding active management, our credit research team reviews and continuously monitors the issuers within the portfolio and the investible universe seeking to preserve capital through our credit risk monitoring process while enhancing returns by exploiting opportunities identified through fundamental credit analysis.

investment process.

Our credit strategies cover global, EUR, USD and CHF investment universes. Bespoke solutions can also be created based on client objectives, desired guidelines and targeted portfolio characteristics.

investment team⁷.

Managed by highly experienced teams with multiple decades of experience in portfolio management, fundamental credit analysis and sustainable investment research, our strategy combines deep knowledge of climate science, data analytics, credit research and portfolio management.

lead investment team.

	Jérôme Collet, PhD Head of Portfolio Management
	Ashton Parker Head of Credit Research
	Raphael Kull, CFA Portfolio Manager
	Sandro Croce CIO Fixed Income
	Ilona Echenard Product Specialist
	Christelle Curt-Cognac Client Portfolio Manager

sustainable investment research.

	Dr Thomas Hohne-Sparborth, PhD Head of Sustainable Investing
	Elise Beaufils Deputy Head of Sustainability Research
	Budha Bhattacharya, PhD Head of Systemic Research
	Rebeca Coriat Head of Stewardship

Find out more about our TargetNetZero credit funds, including share classes.

more information

insights.

more insights

get in touch.

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important information.

This document is a Corporate Communication and is intended for Professional Investors only. This document is a Corporate Communication for Professional Investors only and is not a marketing communication related to a fund, an investment product or investment services in your country. This document is not intended to provide investment, tax, accounting, professional or legal advice. This document is issued by Lombard Odier Asset Management (Europe) Limited (hereinafter the “Company”).

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risks.

TargetNetZero Fixed Income

Rethinking a core debt allocation aligned with net zero

why invest?

1

2

3

4

5

a temperature score to look ahead.

degrees of decarbonisation.

are your investment skills fit for net zero?

our investment approach.

investment process.

investment team⁷.

lead investment team.

sustainable investment research.

insights.

Race against the benchmark to decarbonise portfolios

Cutting emissions: a tale of two targets from the steel and shipping industries

Watch our webinar: ‘Rethink net zero’

Webinar | Net-Zero investing

3 years of TargetNetZero investment-grade credit

Measuring climate alignment, one temperature at a time

Cooling high-carbon sectors with corporate bonds

Targeting net zero: 5 reasons to rethink portfolio decarbonisation

Webinar | rethink net zero: investing in the transition

Investing in quality credit for net zero

How the ECB’s climate tilt favours ice cubes

Why forward-looking decarbonisation is critical to achieving net zero

get in touch.

important information.

risks.

TargetNetZero Fixed Income

Rethinking a core debt allocation aligned with net zero

why invest?

1

2

3

4

5

a temperature score to look ahead.

degrees of decarbonisation.

are your investment skills fit for net zero?

our investment approach.

investment process.

investment team7.

lead investment team.

sustainable investment research.

sources.

insights.

get in touch.

important information.

investment team⁷.