The firm writes that climate change poses a serious threat to society and more investment is needed in companies that are taking steps to reverse the decades-long damage caused by climate change.
“Climate change is the most important issue facing the world. We still have time to avoid the worst case scenarios, but only if we invest capital in climate change solutions that can be adopted and implemented quickly,” says Zach Stein, co-founder and chief investment officer, Carbon Collective. “Companies that are directly involved in climate change solutions have become an important area of the marketplace and investors need a pure-play and low cost way to invest in this space.”
The fund invests in approximately 200 companies of any size market capitalisation within sectors such as clean energy, electrified transportation, efficient buildings, circular economy, sustainable foods, and industrial electrification.
Carbon Collective conducts extensive searches to identify companies that are building solutions within these sectors using a variety of sources including public filings, Internet searches, cross referencing applicable indices, and publicly available market research as well as through relevant industry/sector news or blogs and independent third-party sources such as Project Drawdown and the International Energy Agency.
Only companies that earn at least 50 per cent of revenue from climate solutions are included in CCSO. The fund is rebalanced on an annual basis.
The firm writes that more investment in climate-focused companies allows their climate technologies to become more widely adopted and enables investors to participate in the solution for climate change.
“There are hundreds of companies, both well-known and under-the-radar, that are dedicated to fixing climate change,” says James Regulinski, co-founder, Carbon Collective. “Our fund aims to give investors exposure to these companies in one place. Climate change solutions is an asset class and we’re excited to help investors gain exposure to this important and rewarding space.”
Toroso Investments, LLC serves as investment adviser to the fund and Carbon Collective as its sub-adviser.