Overview
The GMO Horizons Strategy is a global strategy reflecting the view that the world economy is transitioning to a lower carbon future, and that this process will create opportunities for investors to generate excess returns. The Strategy seeks to capture these opportunities and mitigate related risks through significant exposure to impactful climate solutions and reduced total emissions intensity (direct and indirect), while controlling for exposure to Environmental, Social, and Governance (ESG) risks.
The GMO Horizons Strategy is a fully systematic and diversified solution that provides:
- High levels of exposure to companies where revenue is derived from selling green products and services
- Materially lower total emissions than the benchmark as measured using scope 1 emissions and GMO’s proprietary Indirect Emissions model, which estimates the indirect emissions embodied in end-to-end company value chains
- ESG risk mitigation via better ESG characteristics than the benchmark
GMO Webcast
Following an introduction by Jeremy Grantham, the GMO Horizons team discussed how the Horizons Strategy provides a core sustainable solution that reduces total portfolio emissions using our proprietary Indirect Emissions model and capitalizes on long-term growth in the green economy.
During the webcast, our team detailed how GMO Horizons addresses the problem of scope 3 data and captures climate investment opportunities while neutralizing country, sector, and style exposures typically associated with sustainable investing.
Featured Research
Scope 1 and Scope 2 account for only 18% of GHG Emissions
Public equity owners have focused on scope 1 and scope 2 GHG emissions. The GMO Indirect Emissions model allows investors to properly compare companies across their entire value chains.
Featured Research
GMO Horizons: Employing Green Revenues in the Pursuit of Net-Zero Objective
In this paper, we discuss how the GMO Horizons model utilizes green revenues data to provide a more comprehensive and impactful climate solution.
Featured Research
Estimating Value Chain Emissions for Portfolio Construction
The GMO Indirect Emissions model measures company exposure to total value chain indirect emissions, giving investors a clear picture of true total portfolio emissions exposure.
Featured Research
Weighted Average Green Revenue (WAGR): Integrating Climate Solutions into Portfolio Construction
Weighted Average Green Revenue (WAGR) is a useful metric to integrate climate solutions in portfolio construction. This paper discusses, among other topics, how GMO applies WAGR to build green portfolios.
Portfolio Management
