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.

glossary.

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.

177.6 MW

clean energy installed, Enough electricity to power 65,768 UK households for a year

Article 9

SFDR rated

31,114

Olympic swimming pools
(equivalent) of water treated
through projects

Source: LOIM Research as of 31 October 2024.

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?

	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.
	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.
	Outstanding reporting disciplines provide investors with significant insight into the impact of their investments across multiple discipline.
	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.

metlife logo

LO_Fleuron1796 412cWEB.png

MetLife Investment Management

Lombard Odier Investment Managers

Verification & issuer engagement

Portfolio management

Risk management

Impact reporting

Distribution and client servicing

Risk oversight

Contracting entity

Sharing expert
opinions
on global sustainability
and impact market
developments

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.

1) Offshore wind in France

Caixabank – Green bond^{1, 2}

Caixabank’s green-bond programme has helped to finance the construction of the Parc Éolien En Mer De Fécamp wind farm.

The project is France’s third offshore wind farm and will be located 13-22km off the north coast. Spread across 60km2 of shallow water, the farm will comprise 71 wind turbines. The project will add to France’s renewable-energy installed capacity, generating low-carbon electricity and helping to diversify from the country’s large nuclear fleet. This will contribute to the national target of having 32% of final energy consumption supplied by renewables by 2030³.

Following discussions with the local fishing fleet, the turbines will be arranged in a location that limits the impact on fishing operations, as well as being away from main commercial shipping lanes. Additionally, during the construction phase, the project will create 1,400 jobs, while the operating phase will generate 100 permanent jobs, providing social as well as environmental benefits for local communities.

Impact

Construction of France’s third offshore wind farm, providing clean electricity for the majority of local households
Helping to meet France’s renewable energy targets
Diversifying France’s electricity grid from nuclear power

KPIs

497MW wind-power installed capacity
Renewable energy generation to supply 770,000 households, over 60% of the Seine-Maritime region
Creation of 100 permanent jobs

1 Caixabank Green Bond Report 2021.
2 https://parc-eolien-en-mer-de-fecamp.fr/
3 London School of Economics (2020) France’s Integrated Energy and Climate Plan.
Available: https://climate-laws.org/geographies/france/policies/france-s-integratedenergy-and-climate-plan

2) Viking Link – energy security in the UK & Denmark

BNP Paribas – Green bond^{1, 2}

BNP Paribas’ green-bond programme has supported the Viking Link, a new electricity interconnector between the UK and Denmark.

The new transmission cable will have a capacity of 1,400MW, enough to supply 1.4m households. The €2bn project is being developed by the UK’s National Grid in partnership with Denmark’s Energinet.

Alongside other international interconnectors, such as the North Sea Link, the Viking Link will enable more effective use of renewable energy, improved access to clean electricity, and potentially lower prices for consumers. As electricity grids shift from fossil fuels to intermittent renewables, increased interconnection will be critical for sustainability, security and reliability of energy supply. Since there is low correlation between wind-generation output in the UK and Denmark, the interconnector will mean that surplus energy can be utilised in either country.

Impact

New subsea transmission link between the UK and Denmark
Enhanced access to sustainable electricity
Promotes energy security
Potential for lower consumer prices at peak times

KPIs

1,400MW high-voltage direct current electricity link
765km transmission cable

1 BNP Paribas 2021 Green Bond Reporting & Methodology Notes.
2 https://www.viking-link.com/

3) Clean water access in India

Asian Development Bank (ADB) – Green Bond

Improving clean water access and empowering women in India.

The Tamil Nadu Urban Flagship Investment Programme, India will improve the water supply, sewerage and drainage infrastructure in 10 cities across the Indian state of Tamil Nadu, where only 48% of households have access to piped water and 42% are served by a sewerage network.

The state is also one of the most vulnerable-to-drought regions in the world, so as well as being critical for human health and wellbeing this project is also building resilience to the impacts of global warming.

The Tamil Nadu Urban Flagship Investment Programme:

Involves the construction of new water distribution and sewage collection pipelines, along with India’s first solar-powered sewage-treatment facility
Will deliver 66 new reservoirs to bring resilience to local water supply in the face of rising drought frequency
Promotes capacity building and gender equality by training 12 all-female community organisations to form water and sanitation committees, and through several further targets for female involvement

Impact

India’s first solar-powered sewage treatment facility
Helping address inequality in household access to water systems
Improving climate resilience in a climate vulnerable region
Empowering women in a country with high levels of gender disparity
Improving human health and living standards

KPIs

1,328km of new sewage collection pipelines connected to 152,593 households
1,260km of new water distribution pipelines connected to 188,900 households
92 ML of new reservoir capacity

Source: AIM, Global Climate Bond 2022 Impact Report. Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document.

Global Climate Bond Reports

download the Annual Impact Report

download the Quarterly Portfolio Impact Statement Q1, 2024

Find out more about our Global Climate Bond fund, including share classes.

more information

investment team.

Metlife logo.png

Institutional Client Group


Esther Rulli, CAIA Head of Institutional Client Group for UK & Switzerland


Nick Reid Associate Institutional Client Group

Portfolio management


Jonny Giles Associate Portfolio Manager


Richard Petit Director Credit


Todd Howard Managing Director Portfolio Management

Source: LOIM. as of 30 October 2024. Teams are subject to change.

insights.

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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”).

More informations

risks.

Global Climate Bond

Seeking impact through investment-grade global climate bonds

climate change: environmental challenge, impact opportunity.

large opportunity set.

what are climate bonds?

our strategy - why invest with us?

LOIM and MetLife - our partnership.

analysing opportunities.

S

ustainable

P

ositive externalities

E

thics & issuer conduct

C

redit

T

ransparent

R

esponsible issuer

U

se of proceeds

M

aterial & measurable

Key:

Sustainability

Credit

our investments explored.

1) Offshore wind in France

Caixabank – Green bond1, 2

2) Viking Link – energy security in the UK & Denmark

BNP Paribas – Green bond1, 2

3) Clean water access in India

Asian Development Bank (ADB) – Green Bond

Global Climate Bond Reports

investment team.

get in touch.

important information.

Caixabank – Green bond^{1, 2}

BNP Paribas – Green bond^{1, 2}