DWS has launched DWS Invest Low Carbon Bonds, a fund that invests in bonds issued by companies with low carbon intensity. With this new product, the asset manager wants to offer investors the opportunity to contribute to achieving the climate protection target agreed in the Paris Agreement. At the conference in Paris (COP 21) in December 2015, a total of 197 countries agreed to limit global warming to well below two degrees Celsius compared to pre-industrial levels, with efforts to limit it to 1.5 degrees Celsius.
The portfolio managed by Bernhard Birkhaeuser starts with a CO2 intensity that is 50 per cent below the the iBoxx-EUR-Corporate-All-Index. "Our goal is to reduce the portfolio's CO2 intensity by a further seven per cent each year compared to the day of the fund's launch in order to contribute to the reduction of carbon dioxide emissions and the achievement of the Paris climate protection target," says the portfolio manager.
Article 9 classification
DWS Invest Low Carbon Bonds meets the requirements of Article 9 of the EU Disclosure Regulation. All issuers in the portfolio must meet DWS's ESG requirements for environmental and social standards and good corporate governance. As a consequence, companies that violate the United Nations Global Compact or generate more than five percent of sales in controversial sectors such as nuclear power, military defense or tobacco are excluded, as well as companies that generate more than one per cent of their revenues from coal.
At least 70 per cent of the portfolio consists of corporate bonds denominated in Euro. Currency risks are hedged at portfolio level. At least 90 per cent of the bonds in the portfolio must be issued by companies with investment grade credit ratings.
When calculating the CO2 intensity of an issuer, not only the direct carbon emissions of a production line is taken into account, for example through the combustion of fossil fuels in a manufacturing plant, but also indirect emissions from electricity purchased.
With regards to credit quality, DWS Invest Low Carbon Bonds focuses currently on bonds with a "BBB" rating, which are significantly overweighted compared to the benchmark, the Solactive-ISS-Paris-Aligned-Select-Euro-Corporate-IG-Index. In terms of sectors, CO2-intensive issuers in the energy and automotive industries are heavily underweighted. Bonds from the financial and telecommunications sectors, on the other hand, are prominently represented, as well as bonds from the manufacturing sector.
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About DWS Group
DWS Group (DWS) is one of the world's leading asset managers with EUR 820bn of assets under management (as of 31 March 2021). Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.
We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our investment approach strategically.
DWS wants to innovate and shape the future of investing: with approximately 3,500 employees in offices all over the world, we are local while being one global team. We are investors – entrusted to build the best foundation for our clients’ futu