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Best in Class: Pictet Global Environmental Opportunities

Best in Class: Pictet Global Environmental Opportunities

"This is an emergency. Our house is on fire. And it's not just the young people's house, we all live here - it affects all of us.

Those were the words of teenage environmental activist Greta Thunberg as an estimated 4m people took part in climate change protests around the world last month.

The 16-year-old has become a leader in raising awareness of climate change, particularly for younger people.

Having started her campaign in August 2018 - by taking time off school to demonstrate outside the Swedish parliament - Thunberg has since called out many global leaders over their lack of action, speaking at events like the World Economic Forum in Davos and the United Nations Climate Action Summit.

Sustainability seems to be the new buzz word, but the effects of climate change clearly continue to confuse people.

Ms Thunberg, for example, supports her ideology by no longer flying anywhere in the world.

Contrast this with the hypocrisy of Google’s recent climate change conference - attended by numerous A-list stars, including Leonardo DiCaprio, Katy Perry and - let’s not forget - Prince Harry – which saw a rumoured 114 private jets descend on Sicily.

A wasted opportunity for Google Hangouts perhaps.

What can not be disputed is the impact of climate change, as record temperatures, rainfall and hurricanes around the world attest to.

I recently read the PriceWaterhouseCoopers (PwC) Megatrends report, which highlights the challenges we face.

It says, without significant global action, average temperatures are predicted to increase by more than two degrees Celsius - a threshold at which scientists believe significant and potentially irreversible environmental changes will occur.

For some time, fund managers have looked to offer investors solutions to tap into climate change and environmental issues, but the co-ordinated effort has never been as strong as it is today. This week’s best in class is a leader in this market.

Launched in 2011, the Pictet Global Environmental Opportunities fund goes well beyond climate change to focus on a full range of global environmental challenges, such as resource efficiency, suitable packaging and less intensive agriculture.

The fund has been managed by Luciano Diana and Gabriel Micheli since 2014, with Yi Du joining last year.

The key differentiator of this fund is its use of the planetary boundaries framework, first published in Nature magazine in 2009 by Johan Rockstrom.

The planetary boundaries framework identifies nine key environmental areas.

These are: climate change, freshwater use, land use, ocean acidification, nitrogen and phosphorous cycle, biodiversity, ozone depletion, aerosol loading and chemical pollution.

The framework specifies the respective threshold which humanity must not cross to prevent irreversible environmental damage.

Companies which the managers can invest in must operate within the 'safe operating space' where human activities can take place.

Sectors such as oil and gas, mining and most chemicals are excluded.