Our ESG Solutions capabilities are designed to provide outcomes that balance a variety of investor objectives and preferences.
Our current research extends the flexibility and practicality of our ESG Solutions framework by revising the primary objective of the portfolio. Rather than significantly tilting towards companies with the best ESG practices we focus on a different and more specific ESG attribute - carbon emissions. While other attributes could form the focal point of a portfolio (e.g., water usage or diversity metrics), in this piece we explore carbon emissions given the topic’s current prominence, most notably in Paris Aligned Benchmarks (PAB) and Climate Transition Benchmarks (CTB). The goal of our research is to build portfolios with significantly lower carbon emission intensity levels relative to the benchmark, while delivering performance and risk comparable to the underlying index.
Read on to learn more about our approach.
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. The securities referenced may or may not be held in the portfolio at the time of publication and, if such securities are held, no representation is being made that such securities will continue to be held.
The views expressed herein are those of PGIM investment professionals at the time the comments were made, may not be reflective of their current opinions, and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither PFI, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
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