Building a good Portfolio climate :

1) I define my goals :

Learn more about climate change

To act effectively on Climate, we need to :
1) reduce Greenhouse Gas emissions by limiting the use of fossil fuels and promoting alternative energies ;
2) use nature to capture Greenhouse Gases by increasing biodiversity by combating deforestation and the harmful effects ofagrochemicals,
3) reduce energy waste by favoring the circular economy, i.e., a culture of repair rather than use and throw away
4) reduce pollution and all indirect causes of global warming, including ocean pollution .

"To address climate change, our daily habits must change. We need to reduce the use of fossil fuels and move to a sustainable economy, based on circular flows, recycling everything, and reducing Co2 and waste."

Luca Mercalli, president of the Italian meteorological Society

Go to the "Explore" section and check out our climate fact sheet. You will find information and investment ideas on the topic of climate warming.

Define the duration and risk of your investment

Your financial risk profile depends on the maximum loss you would be prepared to accept if things go wrong. Your investment duration is how long you will allow your investment to appreciate in value.

You can find bond solutions by investing in sustainable bonds ("Green Bonds"), which promote sustainability, energy and ecological transition.

Or you can invest in specialized climate equity funds.

Define what percentage of your Portfolio stocks or bonds to devote to climate issues.
Choose one or more mutual funds or ETFs that are well diversified internationally.

Study specialized climate and environmental funds

Climate-dedicated equity funds are generally riskier than international equity funds. At times, they outperform the market (in 2019 and 2020), and at other times they underperform (between 2021 and 2023).

There is a need to incorporate climate issues into a diversified allocation in order to maximize performance and limit financial risks.

Sustainable bond funds generally have a medium-to-long-term investment duration, and thus slightly higher risk than international bonds.

When interest rates fall, they outperform the market (in 2020 and 2023), but when they rise sharply, they lose much more (2022).

There are hundreds of equity funds dedicated to climate . In Italy they are classified among the specialized Climate and Environment funds.

They require an investment time horizon of at least 5 years.

climate equity funds

Data in %. Performance of Climate Funds Performance of International Equity Funds Volatility of Climate Funds Volatility of International Equity Funds
2023 +8,29 +14,42 10,23 8,04
2022 -18,08 -14,74 16,23 13,27
2021 +21,53 +25,22 10,99 8,36
2020 +18,63 +5,43 22,57 19,73
2019 +29,93 +26,55 9,12 7,55

(Data compiled by MCSR based on the annual return of institutional classes of mutual funds and ETFs on the Robo4Advisor platform belonging to the "Climate and Environment" and "International Equities" classifications)

There are a few dozen bond funds dedicated to sustainability, and in particular to energy and ecological transition.

They require an investment time horizon of at least 3 years.

"Green" bond funds

Data in %. Performance of Green Bonds Performance of International Bond Funds. Volatility of Green Bonds Volatility of international bond funds
2023 +6,33 +4,54 4,91 3,62
2022 -16,98 -8,87 5,89 4,61
2021 -1,52 +2,66 2,17 2,33
2020 +3,62 +0,10 4,13 3,90
2019 +6,94 +7,92 2,59 2,42

(Data compiled by MCSR based on the annual return of institutional classes of mutual funds and ETFs on the Robo4Advisor platform belonging to the "Sustainable Bonds" and "International Bonds" classifications)