We seek to address climate change through four core approaches focused
on mitigating risk, uncovering opportunities and creating positive impact across our funds:
- INVESTIn climate
- ENGAGETo reduce
AVOID CLIMATE CHANGE LAGGARDS
Pax excludes the biggest carbon emitters including companies significantly involved in coal, tar sands oil and utilities that are over-reliant1 on coal.
Coal combustion accounts for 45.9% of the world’s CO2 emissions per the latest global statistics.2
Avoiding climate change laggards helps reduce portfolio emissions as well as portfolio risk.
The Pax Global Environmental Markets Fund strives to be fossil fuel free, avoiding investing in companies that Impax Asset Management determines are significantly involved in the extraction and/or refining of fossil fuels.
1 Utilities whose reliance on coal is above the national average, 30% in 2016 according to the U.S. Energy Information Administration, are excluded from Pax portfolios.
2 Source: Key world energy statistics 2016, International Energy Agency
MEASURE PORTFOLIO EMISSIONS
Where it can be measured, Pax reports on the carbon intensity1 of our portfolios in our annual Impact report. As a result of our ESG integration process, Pax funds will generally have weighted average carbon intensity below or significantly below their benchmark indices.
Companies with lower carbon intensity are better able to mitigate regulatory, litigation and reputational risks posed by climate change.
1Carbon intensity measures tonnes of CO2 emitted per $1 million of revenue.
INVEST IN CLIMATE CHANGE SOLUTIONS
Some of our funds proactively focus on investing in companies that provide solutions to climate change.
Clean energy, resource efficiency and low-carbon solution providers will help lead the transition to a sustainable global economy.
The Pax Global Environmental Markets Fund invests in companies that are developing innovative solutions to resource challenges.
The Pax Core Bond Fund holds green bonds that specifically target positive impact in such areas as energy and sustainable infrastructure.
ENGAGE TO REDUCE COMPANY EMISSIONS
Pax climate change engagement primarily focuses on the following issues:
- greenhouse gas reduction targets
- emission and risk disclosure
- renewable energy sourcing & production
- carbon asset risk
Shareholder engagement persuades companies to adopt higher standards when it comes to reducing emissions and mitigating climate change.
Pax engages with companies in the most carbon-intensive sectors, asking management to:
- Track and report on their greenhouse gas emissions
- Establish emissions reduction targets compatible with limiting future warming to 2⁰C
- Assure that their boards are “climate competent”
Learn more about our engagement and advocacy on climate change issues.