Horizons Strategy

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

The Next Generation of Green and Sustainable Investing
at GMO

In this webcast, Chris Heelan, Deborah Ng, and George Sakoulis discuss GMO’s research efforts in carbon transition risk and indirect emissions as well as the opportunities available in the GMO Horizons Strategy.

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Weighted Average Green Revenue (WAGR):
Integrating Climate Solutions into Portfolio Construction

WAGR is a useful metric to integrate climate solutions in portfolio construction. This paper discusses, among other topics, how GMO applies WAGR to build our Horizons Strategy.  

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Estimating Value Chain Emissions for Portfolio Construction

The GMO Indirect Emissions model estimates both direct and indirect carbon emissions from companies’ entire value chains, giving investors a clear picture of true total portfolio emissions exposure. It is a key input to the GMO Horizons Strategy. 

Read the White Paper