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Case study

Green MVE targets new standard in low carbon investing

Low volatility, low carbon equities

The AB Managed Volatility Equities – Green strategy by AllianceBernstein aims to set a new standard in low carbon investing. The Green MVE portfolio of about 70 ASX 300 listed companies is being developed to be potentially carbon neutral and capable of generating attractive returns.

$50m

commitment

70 

ASX 300 listed companies

Target 

carbon neutral 

We think investors will appreciate not only the potential for positive environmental and investment outcomes, but also the transparent and quantifiable way in which those outcomes are achieved. These attributes, in our view, make Green MVE an attractive and ground-breaking addition to the universe of available low-carbon investment strategies.
Roy Maslen
Chief Investment Officer - Australian Equities, AllianceBernstein

Our investment

The CEFC has committed up to $50 million to the AB Managed Volatility Equities – Green (Green MVE) – its first investment in listed equities. The investment allows the CEFC to further extend its emissions focus across diverse businesses and through different financial structures. Green MVE aims to make the portfolio carbon neutral by offsetting the emissions through third-party arrangements to retire carbon credits. The carbon credits are eligible under Australia’s National Carbon Offset Standard.

our impact 

This active investment strategy, with a focus on encouraging a reduction in carbon emissions, is one that the CEFC expects will be well received by institutional investors such as superannuation funds, family offices and insurers who are prioritising low carbon assets.

The strategy starts by anchoring the portfolio in low-volatility equities, which are typically low-carbon, and then by applying a ‘price on carbon’ during the stock selection process to efficiently reduce the portfolio’s carbon emissions. This also helps to calculate the emissions associated with the portfolio holdings.

 

Watch our video 

Why is climate scenario analysis an important consideration for investors?

Last updated 20 August 2020. National, Wind, Solar, Bioenergy, Renewable energy, Low emissions, Energy efficiency