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ENVIRONMENTAL, SOCIAL AND GOVERNANCE INVESTING

Climate

As an asset manager with a long-term perspective, Neuberger Berman recognizes the impact of climate change and that the transition toward global net-zero emissions is well underway. We are committed to partnering with clients seeking to have their assets managed in line with a net-zero objective.
Our Approach to Climate Investing

We believe that climate change is a financially material issue affecting many industries and asset classes. Despite the urgency of climate change, we believe that this should be a time for optimism, driven by a convergence of technology and policy that could jumpstart efforts to address our climate challenges and present a timely opportunity to invest in a secular growth story. The resulting capex cycle could have significant benefits for key corporate players and investors while helping the world transition to a cleaner future.

 

 

 

 

Neuberger Berman Net-Zero Alignment Indicator

At this early stage of net-zero adoption, we believe investors are better served taking a more nuanced and active approach to achieving their specific climate-investing goals. In partnership with our clients, we designed a proprietary Net-Zero Alignment Indicator, which seeks to capture an issuer’s current status and progress over time toward net-zero targets. It incorporates decarbonization targets and combines forward- and backward-looking inputs that were informed by the high-level expectations of the Institutional Investor Group on Climate Change (IIGCC).  You can read more about the Indicator in our white paper, Net-Zero Alignment: Beyond the Numbers.

  • The Indicator draws on 30+ forward-looking quantitative data points from traditional ESG data providers and specialist climate data providers.
  • The Indicator incorporates expert qualitative judgement from 120+ equity and credit research analysts.
  • The Indicator serves as a roadmap for engagement on net zero – using the Indicator, analysts can identify key weaknesses in issuer climate action plans and engage in productive dialogue around them.
  • We hold numerous climate-related engagement meetings with corporate management teams: in 2022, we held 901 equity meetings and 279 fixed income meetings.
  • Read more about our climate engagement here.

 

  • The Indicator is designed to enable clients to meet climate objectives without sacrificing investment returns. It is a highly customizable framework that allows for objective measurement of portfolio net-zero alignment status as well as construction of portfolios with net-zero alignment and engagement targets.
  • In our white paper, The Limitations of Passive Investing to Achieve a Net-Zero Outcome, we address the challenges of building net-zero-aligned portfolios in a world where climate benchmarks proliferate. We believe such products are not meeting investors’ intended climate objectives and may also be exposing them to unintended active risk.

 

 

The Indicator is aligned with key industry climate transition risk frameworks including:

  • International Financial Reporting Standards (IFRS)
  • Institutional Investors Group on Climate Change (IIGCC)
  • Transition Plan Taskforce (TPT)
  • United Nations Framework Convention on Climate Change (UNFCCC)
  • We have an extensive track record of partnering with clients and deploying the Indicator across equities and fixed income.
  • We manage $9B+ of AUM in dedicated net-zero funds and accounts.
  • We can set net-zero and climate objective at client request for 90+ net-zero capable strategies across our platform.

You can read more about the Indicator in a Harvard Business School case study, Investing in the Climate Transition at Neuberger Berman, written by Professor George Serafeim. The case study profiles Neuberger Berman and our client-focused approach to innovation. It explains our Net-Zero Alignment Indicator and how we have implemented it in climate transition fixed income and equity solutions.

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Our Climate Offering

We offer multiple net-zero aligned funds and strategies across our platform to meet differing client objectives.

 

Fixed Income

Neuberger Berman Climate Transition Multi-Sector Credit Strategy

Solving for a given yield profile using an engagement-driven approach that targets net-zero alignment

 

Quantitative Equity

Neuberger Berman Climate Transition Global Equity Strategy

Seeks to deliver the highest possible net-zero alignment and 50% carbon footprint reduction within a 1% tracking error

Thematic Equity

Neuberger Berman Climate Innovation Strategy

Targets long-term capital appreciation and exposure to the decarbonization theme through investing in climate innovation related technologies and activities

Impact Equity

Neuberger Berman U.S. Equity Impact Strategy

Exposure to climate solutions with a quantified measure of avoided emissions in a concentrated portfolio

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To learn more about how Neuberger Berman assesses climate-related issues and opportunities through our approach to governance, strategy, risk management, and metrics and targets, read our latest Task Force on Climate-related Financial Disclosures (TCFD) Report.

Industry Collaboration
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In November 2021, Neuberger Berman became a signatory to the Net Zero Asset Managers Initiative (NZAMI). We have set interim targets for assets where clients have directed us to manage accounts in line with net zero by 2050.

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