FIFI PETERS: Ninety One has lodged an application to the Financial Sector Conduct Authority here in South Africa for its popular Global Environment Fund to be registered as a rand-denominated feeder fund in the country. It is a fund that helps its investors balance the climate risk in their portfolio by investing in companies that are transitioning to a low-carbon future.
So that’s really why we believe that investing in a concentrated portfolio of climate-solution providers allows, first of all, investors to hedge that climate risk, so to offset some of those investments they might have that really don’t perform quite so well as we transition, but more importantly to give those investors access to a really attractive, high structural growth investment opportunity that has the ability to outperform as the pace of decarbonisation accelerates.
Similarly in China, as the Chinese government thinks about stimulus, thinks about infrastructure stimulus, [this] is a really big part of that infrastructure investment – whether it’s, again, clean electricity or investment in grid, but also investment in low-carbon transportation. So in China at the moment, for example, almost a third of all cars sold are electric cars. So China’s leading the world in the electrification of transport.
So it’s a bit of a proprietary way of finding those companies. We access a universe looking at the carbon data, so finding the companies that have products and services that use less carbon. So that allows us to find companies that you might not normally think were really going to outperform and decarbonise more quickly. We see more attractive valuations in some of those more undiscovered areas.
We own a company in Denmark called Novozymes, that similarly is the world leader in manufacturing enzymes. Enzymes are used to allow processes to run at lower temperatures. So they have solutions for consumer products, for industrial companies, and also for agriculture and more sustainable fertilisers and other agricultural products.
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