Website kicks off with financing from Article 9 provided by DWS.
The DWS Invest Low Carbon Bonds fund, a leading investment strategy, focuses on low carbon bonds and aims to contribute to the reduction of CO2 emissions and achieving the Paris climate protection target.
The portfolio, managed by Bernhard Birkhäuser, consists of at least 70% corporate bonds denominated in euros. Notably, at least 90% of the bonds in the portfolio are issued by issuers with investment-grade ratings.
To reduce carbon exposure, the strategy carefully excludes or limits investments in issuers or bonds associated with high carbon emissions or fossil fuel activities. Companies generating more than 1% of their revenue from coal are generally excluded, and companies that violate the United Nations Global Compact or generate more than 5% of their revenue in controversial sectors such as nuclear energy, armaments, or tobacco are also excluded.
The portfolio includes bonds from the financial and telecommunications sectors, as well as papers from the manufacturing industry. However, CO-intensive emitters from the energy and automotive industries are significantly underweighted. This approach helps the portfolio maintain a CO2 intensity that is 50% lower than the iBoxx EUR Corporate All-Index.
The DWS Invest Low Carbon Bonds portfolio hedges foreign currency risks at the portfolio level. It also invests in green bonds and other fixed income instruments that finance projects with measurable CO2 reductions or contribute to a low-carbon economy transition. The fund focuses on tangible emission reductions rather than credits or avoided emissions that are uncertain or not equivalent to real-world decarbonization.
The goal of the DWS Invest Low Carbon Bonds portfolio is to reduce CO2 emissions by an additional 7% each year compared to the launch date. Despite progress in lowering its carbon footprint, the portfolio still shows a slight over-budget in emissions (around 5% above limit), indicating ongoing work is needed to achieve full alignment with the Paris climate target.
The strategy emphasizes real emission cuts in the bond portfolio, prioritizes low-carbon and climate-resilient investments, and actively manages holdings to support a gradual transition to a low-carbon economy consistent with the Paris Agreement objectives. The portfolio only includes companies that meet DWS's environmental and social standards, as well as good corporate governance (ESG) requirements.
[1] Source: DWS Investments
In conclusion, the DWS Invest Low Carbon Bonds fund provides a unique opportunity for investors to align their fixed income investments with the global climate goals and support the transition to a low-carbon economy, while still maintaining a focus on investment-grade bonds and a well-diversified portfolio.
- "Other fixed income instruments in the DWS Invest Low Carbon Bonds portfolio include green bonds, which finance projects with measurable climate-change mitigating benefits, aligning with the investment strategy's emphasis on environmental science."
- "To further support the fund's climate-change objectives, it excludes companies generating more than 1% of their revenue from coal, and also excludes companies that violate the United Nations Global Compact or generate more than 5% of their revenue in controversial sectors like nuclear energy, armaments, or tobacco."
- "Investors can incorporate climate-change considerations in their finance and investing decisions through the DWS Invest Low Carbon Bonds fund, a leading strategy that not only focuses on investment-grade bonds and a well-diversified portfolio but also prioritizes tangible emission reductions and a low-carbon economy transition."
