investment viewpoints

Private credit as a catalyst for net-zero

Private credit as a catalyst for net-zero
Peter Pulkkinen - Portfolio Manager

Peter Pulkkinen

Portfolio Manager
Rhys Marsh - Portfolio Manager

Rhys Marsh

Portfolio Manager
Adriana Becerra Cid - Sustainability Manager

Adriana Becerra Cid

Sustainability Manager

As the world faces the urgent challenge of climate change, there is a pressing need for innovative solutions to reduce carbon emissions and transition to a sustainable future. Versatile private credit is well positioned to play a key and differentiated role in accelerating the transition. 


Need to know:

  • The strategy supported the generation or enablement of 14,765 MWh of renewable energy in 2022
  • 6,388 tCO2e in greenhouse gas GHG emissions were avoided over the course of the year as a direct result of the workings of the portfolio holdings
  • As of 2022, we have invested in three climate solution providers supporting sustainable activities in 44 US states


A CLIC® economy

Our Sustainable Private Credit strategy is dedicated to investing in climate solution providers that are at the forefront of this economic transition and contribute to a broader societal shift to an economy that is Circular, Lean, Inclusive, and Clean (CLIC®).

In the strategy’s inaugural sustainability report, we will provide an overview of our investment strategy and sustainability approach and highlight the achievements of the strategy’s portfolio companies during the year 2022. 

The role of private credit

As a forward-looking investor, our goal is to identify businesses that are mitigating climate risks and acting on the opportunities generated by the transition. We believe that there are significant opportunities available to advance the net-zero transition, and these opportunities will require more innovative and flexible solutions than commonly offered through traditional capital markets. We additionally believe that an aligned approach to private credit offers strong opportunities to provide additionality via stewardship and engagement, and to mobilise catalytic capital.

The broader consensus move to net-zero creates investment opportunities in select sectors targeted as priorities by large asset owners and corporations. While many large companies are creating meaningful in-house contributions to the climate transition, some of the most impactful solutions are coming from entrepreneurs within fragmented, under-financed markets working directly with corporate partners. Such corporate consumers of sustainable goods and services often find it more accretive to purchase and scale an externally sourced product or service than to allocate such development to balance sheet.

Focus sectors

The strategy seeks to support a climate transition and tackle the net-zero opportunity by financing both disruptive and experienced climate solution providers, primarily ones which operate in the industries depicted in figure 1.

Climate solution providers are companies that offer or enable a solution contributing to decreasing greenhouse gas emissions along with increasing climate resiliency and adaptation through the delivery of sustainable goods, services, or assets.

Figure 1: Portfolio distribution in focus sectors

SPC - distributed renewables.svg
Small-scale power 
resources including 
solar, often operating 
at the grid-edge



SPC - resource efficiency.svg
Products/ services
that allow for more
efficient use of
resources, such as
energy efficiency and
smart city



SPC - storage and microgrids.svg
Storage & 
Related to Distributed 
Renewables but with 
more focus on
resilience and ability
to operate power 



SPC - energy transition.svg
Energy transition
reducing carbon
emission from
established industries, including 
low-carbon transportation



SPC - waste to value.svg
Waste to value
Used of waste for the 
creation of renewable 
chemicals, fuels, and 
agricultural products



SPC - digitalisation.svg
Digitalisation and other enabling activity
Providers and enablers of climate infrastructure
particularly supporting the electrification of the economy and the 
deployment of mobile low-carbon infrastructure solutions such as 5G technology


Case studies1



Our fiduciary duty

As an asset and wealth manager, we believe it is our fiduciary duty as stewards to understand and avoid risks while helping our clients capture the opportunities associated with the transition to a CLIC® economy. Our Sustainable Private Credit strategy uses a robust, proprietary, and science-based approach that we believe enhances our ability to calibrate risk and return as the transition unfolds. We also use our influence to engage with investees, seeking to strengthen business models, enhance environmental and social additionality, and catalyse follow-on investments.

For a copy of the full 2022 Annual Sustainability Report, please contact your investor relations representative or the Sustainable Private Credit Team's Business Manager at


1 Important information on case studies
The case studies provided in this document are for illustrative purposes only and do not purport to be recommendation of an investment in, or a comprehensive statement of all of the factors or considerations which may be relevant to an investment in, the referenced securities. The case studies have been selected to illustrate the investment process undertaken by the Manager in respect of a certain type of investment, but may not be representative of the Fund's past or future portfolio of investments as a whole and it should be understood that the case studies of themselves will not be sufficient to give a clear and balanced view of the investment process undertaken by the Manager or of the composition of the investment portfolio of the Fund now or in the future.


important information.

For professional investors only

This document is issued by Lombard Odier Asset Management (Europe) Limited, authorised and regulated by the Financial Conduct Authority (the “FCA”), and entered on the FCA register with registration number 515393. This document is approved at the date of publication.

Lombard Odier Investment Managers (“LOIM”) is a trade name.

This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.

UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation scheme does not apply in respect of any investment or services provided by an overseas person. A summary of investor rights and information on the integration of sustainability risks are available at:

Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.

Source of the figures: Unless otherwise stated, figures are prepared by LOIM.

Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.

No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Asset Management (Europe) Limited prior consent. In the United Kingdom, this material is a marketing material and has been approved by Lombard Odier Asset Management (Europe) Limited which is authorized and regulated by the FCA. ©2023 Lombard Odier IM. All rights reserved.