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    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: Operational risk and risks related to asset safekeeping, Model risk and Financial, economic, regulatory and political risks. 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 Equities

    Rethinking a core allocation aligned with net zero

     

    A diversified systematic investment strategy to decarbonising the economy, aiming for low tracking error against mainstream benchmarks and materially less greenhouse gas emissions to reconcile climate and investment objectives.

    52 billion

    tons of CO2 emissions per year1

    zero

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

    €1.2trillion

    annual total green investment needs in the EU to reach net-zero emissions by 20502

    why invest?
    why invest?·a temperature score to look ahead·degrees of decarbonisation·our philosophy·investment process·investment team ·performance·get in touch

    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. Our track record shows strong climate and financial results3 by combining the extensive experience and skill of our systematic equity team with our dedicated sustainability experts. 

    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:

    locom/_legacy/images/AssetManagement/Investment_strategies/TNZ/Equity/Equity-page-refresh-2025/icons/6

    Translate emissions across
    diverse companies and sectors 
    into a single temperature score 
    locom/_legacy/images/AssetManagement/Investment_strategies/TNZ/Equity/Equity-page-refresh-2025/icons/8

    Target forward-looking decarbonisation 
    that relates to the real economy 
    compared to a low carbon approach today
    locom/_legacy/images/AssetManagement/Investment_strategies/TNZ/Equity/Equity-page-refresh-2025/icons/7

    Aim to materially 
    reduce greenhouse gas emissions 
    faster than the benchmark 
    locom/_legacy/images/AssetManagement/Investment_strategies/TNZ/Equity/Equity-page-refresh-2025/icons/5

    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 philosophy and approach.

    TargetNetZero Equities is a benchmark-aware strategy that aims to align with temperature goals, deliver diversification, pursue compelling risk-adjusted returns and support investors to meet both financial and sustainability objectives.

    Our strategy uses a systematic approach that leverages LOIM’s proprietary ITR data to identify fast-transitioning stocks. We construct the portfolio using an optimisation framework6 designed to maximise efficiency in terms of active risk and return, while fitting into a core allocation. This approach integrates both financial and extra-financial constraints to aid alignment with investor mandates and sustainability goals. Portfolio efficiency is further enhanced by:


    Finally, we leverage our ITR data through stewardship, with thematic engagement priorities including decarbonisation, biodiversity loss, social issues and circularity.
     

    investment process.

    Our strategies cover global, European, global non-Swiss and emerging market investment universes. Bespoke solutions can also be created based on client objectives, desired guidelines and targeted portfolio characteristics. The investment team is experienced in collaborating closely with investors to tailor to individual needs such as exclusions, custom benchmarks and specific tracking-error targets.

    investment team9

    Managed by highly experienced teams in systematic equities and sustainable investment research, our strategy combines deep knowledge of climate science, data analytics and portfolio management.

     

    lead investment team.

    LOcom-AuthorsAM-Mieszkalski.png
    Nicolas Mieszkalski
    Lead Portfolio Manager
    LOcom_AuthorAM-Medvedev.png

    Alexey Medvedev, PhD
    Lead Portfolio Manager
    locom/_legacy/images/experts/LOcom-AuthorsAM-Dembele Cheick Dembele, CFA
    Portfolio Manager
    locom/_legacy/images/experts/LOcom_AuthorsAM-Ducrot Francois Ducrot
    Client Portfolio Manager
    locom/_legacy/images/experts/LOcom-AuthorsAM-Echenard Ilona Echenard
    Product Specialist

    sustainable investment research.

    LOcom_AuthorsAM-Hohne-Sparborth.png

    Dr Thomas Hohne-Sparborth, PhD
    Head of Sustainable Investing
    locom/_legacy/images/experts/LOcom_AuthorsAM-Beaufils Elise Beaufils
    Deputy Head of Sustainability Research
    locom/_legacy/images/experts/LOcom-AuthorsAM-Bhattacharya Budha Bhattacharya, PhD
    Head of Systemic Research
    locom/_legacy/images/experts/LOcom-AuthorsAM-Coriat Rebeca Coriat
    Head of Stewardship

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

    more information

    sources.

    1 World Resources Institute; excludes land-use change.
    2 European Central Bank, Green investment needs in the EU and their funding, January 2023. EU refers to European Union.
     3 Past performance is not a reliable indicator of future results.
    4 LOIM. For illustrative purposes only. Trajectories are based on activity and region mix of the company.
    5 LOIM. For illustrative purposes only.
    6  Optimisation involves a numerical procedure that optimises the portfolio in accordance with certain quantitative objectives under a set of constraints. The typical objective of portfolio optimisation is the tracking error. 
    7 LOIM. For illustrative purposes only. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk. Style active risk refers to value, quality, momentum, low beta and small size.
     8 The tracking error target is an internal target and is not part of the investment objective of the fund disclosed in the Prospectus/PPM. It is not guaranteed and may not be achieved. Tracking error ex-ante is based on internal and/or external risk models. Actual returns will vary depending on market performance and investment duration. The fund is not a guaranteed product, and capital may be at risk. Tax treatment depends on the individual circumstances of each investor and may change over time. Performance may also be affected by currency fluctuations. Additional information on assumptions, data, and scenario analysis is available upon request.
    9 LOIM. As of September 2025. Teams are subject to change.

    insights.

    Forward thinking in net-zero investing: four myths debunked
    equitiesTNZ equities
    equitiesTNZ equities

    Forward thinking in net-zero investing: four myths debunked

    Harvesting carry in equities by improving dividend tax efficiency
    equitiesTNZ equities
    equitiesTNZ equities

    Harvesting carry in equities by improving dividend tax efficiency

    Keeping equity portfolios aligned to decarbonisation as US climate policy reverses
    equitiesTNZ equities
    equitiesTNZ equities

    Keeping equity portfolios aligned to decarbonisation as US climate policy reverses

    Race against the benchmark to decarbonise portfolios
    equitiesTNZ equities
    equitiesTNZ equitiesTNZ Fixed Income

    Race against the benchmark to decarbonise portfolios

    How can the net-zero theme add value for investors?
    equitiesTNZ equities
    equitiesTNZ equities

    How can the net-zero theme add value for investors?

    Cutting emissions: a tale of two targets from the steel and shipping industries
    sustainable investmentTNZ equities
    sustainable investmentTNZ equitiesTNZ Fixed Income

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

    Optimal portfolio alignment to net-zero targets
    equitiesTNZ equities
    equitiesTNZ equities

    Optimal portfolio alignment to net-zero targets

    Capturing market upside while benefitting from net-zero tilts
    equitiessustainable investment
    equitiessustainable investmentTNZ equities

    Capturing market upside while benefitting from net-zero tilts

    Sustainability in the new Trump era
    equitiesPlanetary Transition
    equitiesPlanetary TransitionTNZ equities

    Sustainability in the new Trump era

    Decarbonisation: are companies on the right track?
    equitiesTNZ equities
    equitiesTNZ equities

    Decarbonisation: are companies on the right track?

    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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