Craig MacKenzie discusses how to use SAA to achieve a 1.5C aligned portfolio

Ahead of the Virtual Edition of the Sustainable Investment Forum Europe 2020, a 4-Part Digital Event Series starting from 8 September, we caught up with Craig MacKenzie, Head of Strategic Asset Allocation at Aberdeen Standard Investments, to discuss how to use SAA to achieve a 1.5C aligned portfolio.

 

Q. How does a 1.5C portfolio differ from business-as-usual institutional portfolio?The current economy allocates too much capital to fossil fuels and other carbon intensive activities, and not enough to low carbon alternatives.

A 1.5C portfolio would be one where capital is reallocated from carbon intensive to carbon free alternatives and to energy efficiency in energy, transport, industrial processes, buildings, agriculture and land use. A 1.5C portfolio will have a significantly lower carbon footprint and lower allocation to fossil fuel producers. It will also have a higher allocation to carbon efficient companies and climate solutions – as defined by the EU Taxonomy. In addition to shifts within equities and credit, it may also have larger allocations to the infrastructure asset class, which is particularly rich in climate opportunities. The amount of portfolio shift is hard to pin down precisely, because it depends on the particular technology pathway, and how much ‘negative emissions’ will be relied on to hit the target.

 

Download the full interview along with other industry leader interviews by clicking here.

 

Craig Mackenzie will be sharing further insights at the Virtual Edition of the Sustainable Investment Forum Europe 2020, organised in Partnership with UNEP-FI. The 4-Part Digital Event Series will take place on the 8th, 11th, 15th and 22nd September 2020. Secure your place today by registering here.