Capital
allocation

Capital allocation

As outlined in the Introduction, we believe the case and opportunity remains strong for directing capital to support the transition towards a net zero economy. Our Climate Transition Global Equity Fund uses an active, fundamental, research-driven approach to capture opportunities arising from the transition to low-carbon economy and warmer world. The Fund’s key performance driver is bottom-up stock selection, which leverages the combined connected analytical resources of our ESG and equities investment teams.

The Fund invests in ‘Transition’ companies who are among leaders within their sector in transitioning business operations and value chain to be resilient for a warmer, lower-carbon future. The Transition Risk (T-Risk) model combines a top-down sub-industry climate risk exposure assessment with a bottom-up company risk management score to identify the companies eligible for inclusion in the transition sleeve. Investment in ‘Solution’ companies is another focus of the Fund. These companies generate at least 20% of revenue from the provision of products or services that either help mitigate to or adapt against the adverse impacts of climate change.

This translates to investment themes, which have alignment with the principles of the following sustainable development goals:

Holdings classification

Portfolio KPIs

Scroll to view full table

2023 Data Summary table		Climate Transition Global Equity (CTGE)			MSCI ACWI
		Dec 2021	Dec 2022	Dec 2023	Dec 2021	Dec 2022	Dec 2023
Fossil Fuels	Percentage weight of companies with fossil fuel reserves	0	0	0	5.7	8	6.9
Carbon Emissions¹⁰	Weighted average intensity (tCO²e/$M Sales)	83.9	89.4	96.9	151.2	140.9	128.0
Carbon Emissions¹⁰	Carbon footprint (tCO₂e/$M invested)	19.3	22.2	18.2	78.3	105.8	101.6
Sustainable Activities	Percentage weight of companies offering clean technology solutions	58.1	50.7	54.1	38.2	36.2	38.3
Climate Governance	Percentage of companies with a CDP score >B	70.8	84.4	71.0	31.6	39.9	37.2
Climate Governance	Percentage of companies with SBTi¹¹ ambitions	56.2	80.0	71.0	14.0	29.0	31.8
Stewardship	Voting percentage¹²	98	100	96¹³	-	-	-
As at date - 31/12/2023 Source: Aladdin and MSCI.

¹⁰ Based on 99.9% data coverage for CTGE Fund and 93.0% data coverage for MSCI ACWI Benchmark.
¹¹ Science Based Targets initiative includes either set or commitment to set targets validated by the Science Based Targets initiative.
¹² The percent of Fund holdings we have exercised our voting rights on.
¹³ Due to conflict of interest, we were unable to vote against all holdings as the CTGE had investments in Aviva Investor Funds.

Principle Adverse Impact (PAI) indicators follow the guidelines released in the Regulatory Technical Standards (RTS) as part of the EU’s Sustainable Financial Disclosure Regulation (SFDR), which aims to increase transparency in how financial market participants and advisers consider sustainability risks and opportunities in their processes. In the context of this Fund, PAI data is used to ensure that the Fund’s investments do no significant harm (DNSH) to society and the environment and align with the sustainability objective. The following sample metrics follow Aviva Investor’s proprietary PAI framework, utilising MSCI’s SFDR Adverse Impact Metric Methodology¹⁴, to assess companies against the Do No Significant Harm¹⁵ thresholds.

Security Description Companies mentioned throughout this report are for illustrative purposes only, not intended as investment recommendations.	Environmental Impact Solutions - Max. % of Rev.(Wt Avg-PORT Delta NMV)	Company has SBTI approved Emission Target	PAI 02: Carbon Emissions Intensity (EVIC EUR Scope 1,2&3)	PAI 03: Carbon Emissions Intensity (Sales in EUR Scope 1,2&3)	PAI 05: Non Renewables Consumption	PAI 06: Energy Consumption Intensity (EUR)
ACCENTURE PLC CLASS A	2.9	Yes	Neutral	Neutral	Neutral	No data
ALPHABET INC CLASS A	2.9		Neutral	Neutral	Green	No data
ASM INTERNATIONAL NV	0.0	Yes	Neutral	Amber	Neutral	Neutral
ATS CORP	14.2		Neutral	Neutral	Neutral	Neutral
AUTODESK INC	15.4	Yes	Neutral	Neutral	Green	No data
AXA SA	0.0		Neutral	Neutral	Neutral	No data
BYD LTD H	72.2		Neutral	Neutral	No data	No data
CADENCE DESIGN SYSTEMS INC	0.0		Neutral	Neutral	Neutral	No data
DANAHER CORP	1.1		Neutral	Neutral	No data	Neutral
EDP RENOVAVEIS SA	97.8		Neutral	Neutral	No data	Neutral
EPIROC CLASS A	4.7	Yes	Neutral	Neutral	No data	Neutral
HOME DEPOT INC	0.0		Neutral	Neutral	No data	Neutral
HUBBELL INC	0.6		Neutral	Neutral	Neutral	Neutral
LINDE PLC	0.0	Yes	Neutral	Neutral	Neutral	Neutral
MERCK & CO INC	0.0	Yes	Neutral	Neutral	Neutral	Neutral
MICROSOFT CORP	21.7	Yes	Neutral	Neutral	Green	No data
MOODYS CORP	0.0	Yes	Neutral	Neutral	Green	No data
MUENCHENER RUECKVERSICHERUNGS-GESE	0.0		Neutral	Neutral	Neutral	No data
NESTLE SA	0.0	Yes	Neutral	Neutral	Neutral	Neutral
NVIDIA CORP	39.4		Neutral	Neutral	Neutral	Neutral
OTIS WORLDWIDE CORP	0.0		Neutral	Neutral	Neutral	Neutral
PEPSICO INC	0.0	Yes	Neutral	Neutral	Neutral	Neutral
PTC INC	5.2		Neutral	Neutral	No data	No data
RELX PLC	0.0		Neutral	Neutral	No data	No data
RENTOKIL INITIAL PLC	0.0		Neutral	Neutral	Neutral	No data
ROCHE HOLDING PAR AG	0.0		Neutral	Neutral	Neutral	Neutral
SCHNEIDER ELECTRIC	28.5	Yes	Neutral	Neutral	Neutral	Neutral
SIEMENS N AG	12.0	Yes	Neutral	Neutral	No data	No data
SIKA AG	1.1		Neutral	Neutral	Neutral	Neutral
T MOBILE US INC	0.0	Yes	Neutral	Neutral	Neutral	No data
TAIWAN SEMICONDUCTOR MANUFACTURING	7.0		Neutral	Neutral	Neutral	Neutral
TRANE TECHNOLOGIES PLC	1.8	Yes	Neutral	Neutral	Neutral	Neutral
UNITED RENTALS INC	0.1		Neutral	Neutral	Neutral	No data
UNITEDHEALTH GROUP INC	0.0		Neutral	Green	Neutral	No data
VERALTO CORP	9.7		No data	No data	No data	No data
VISA INC CLASS A	0.0	Yes	Neutral	Neutral	Green	No data
WASTE MANAGEMENT INC	13.2	Yes	Neutral	Amber	Neutral	Neutral
XYLEM INC	47.6		Neutral	Neutral	Neutral	Neutral
As at date - 31/12/2023 Source: The Aviva Investor PAI framework is based on a Red , Amber, Green (RAG) output, with “Reds” designating that a company is breaching our Do No Significant Harm test and therefore is ineligible for inclusion in this fund.

¹⁴ MSCI SFDR Adverse Impact Metrics Methodology
¹⁵ Do Not Significant Harm (DNSH) tests follow the requirements set out by the Sustainable Finance Disclosure Regulation (SFDR).
Data from third party data providers may be incomplete, inaccurate or unavailable. Where we seek to rely on proprietary models these may similarly rely on information which is incomplete, inaccurate or unavailable. As a result, there is a risk that AI may, from time to time, incorrectly assess a security, issuer or index. There is also a risk that AI, or the third-party data providers on which we may depend, may not interpret or apply the relevant characteristics correctly. AI does not warrant the fairness, accuracy or completeness of any data used, or assessment made in reference to this document.

Principal Adverse Indicators

Security Description

PAI 02: Carbon Emissions Intensity (EVIC in EUR Scope 1, 2 & 3)

PAI 03: Carbon Emissions Intensity (Sales in EUR Scope 1, 2 & 3)

PAI 04: Fossil Fuel (Strong Screen)

PAI 05: PCT Non Renewable Consumption

PAI 06: Energy Consumption Intensity (EUR)

PAI 07: Biodiversity Controversy

PAI 08: Water Efficiency

PAI 09: Hazardous Waste

PAI 10: Overall Flag

PAI 11: Mech UN Global Compact

PAI 12: Gender Pay Gap Ratio

PAI 13: Male \ Female Board Ratio

ACCENTURE PLC CLASS A

Neutral

No data

Neutral

No data

Amber

Neutral

Low Population

Green

ALPHABET INC CLASS A

Neutral

Green

No data

Neutral

No data

Amber

No data

Amber

ASM INTERNATIONAL NV

Neutral

Amber

Neutral

No data

Neutral

Low Population

Green

ATS CORP

Neutral

No data

Neutral

Amber

No data

Neutral

AUTODESK INC

Neutral

Green

No data

Neutral

No data

Neutral

No data

Green

AXA SA

Neutral

No data

Neutral

No data

Amber

Neutral

No data

Green

BYD LTD H

Neutral

No data

Neutral

No data

Amber

No data

Amber

CADENCE DESIGN SYSTEMS INC

Neutral

No data

Neutral

No data

Neutral

Amber

No data

Neutral

DANAHER CORP

Neutral

No data

Neutral

No data

Neutral

No data

Neutral

EDP RENOVAVEIS SA

Neutral

No data

Neutral

No data

Neutral

No data

Neutral

EPIROC CLASS A

Neutral

No data

Neutral

No data

Neutral

No data

Green

HOME DEPOT INC

Neutral

No data

Neutral

No data

Amber

No data

Neutral

HUBBELL INC

Neutral

No data

Neutral

Amber

No data

Neutral

LINDE PLC

Neutral

No data

Neutral

Amber

Neutral

No data

Amber

MERCK & CO INC

Neutral

No data

Neutral

Amber

Neutral

No data

Green

MICROSOFT CORP

Neutral

Green

No data

Neutral

No data

Low Population

Amber

Neutral

Green

MOODYS CORP

Neutral

Green

No data

Neutral

No data

Neutral

No data

Neutral

MUENCHENER RUECKVERSICHERUNGS-GESE

Neutral

No data

Neutral

No data

Low Population

Neutral

No data

Neutral

NESTLE SA

Neutral

No data

Neutral

Amber

Neutral

Green

Neutral

NVIDIA CORP

Neutral

No data

Neutral

No data

Neutral

OTIS WORLDWIDE CORP

Neutral

No data

Neutral

No data

Green

PEPSICO INC

Neutral

No data

Amber

Neutral

Green

Neutral

PTC INC

Neutral

No data

Neutral

No data

Neutral

Amber

No data

Neutral

RELX PLC

Neutral

No data

Neutral

No data

Neutral

No data

Neutral

RENTOKIL INITIAL PLC

Neutral

No data

Neutral

No data

Amber

Neutral

ROCHE HOLDING PAR AG

Neutral

Low Population

Neutral

Amber

Neutral

No data

Neutral

SCHNEIDER ELECTRIC

Neutral

No data

Neutral

Amber

Neutral

No data

Green

SIEMENS N AG

Neutral

No data

Neutral

No data

Low Population

Amber

Neutral

No data

Green

SIKA AG

Neutral

No data

Neutral

Low Population

Neutral

T MOBILE US INC

Neutral

No data

Neutral

No data

Amber

No data

Neutral

TAIWAN SEMICONDUCTOR MANUFACTURING

Neutral

No data

Neutral

Amber

No data

Amber

TRANE TECHNOLOGIES PLC

Neutral

No data

Neutral

Amber

No data

Green

UNITED RENTALS INC

Neutral

No data

Neutral

No data

Low Population

Neutral

Amber

No data

Neutral

UNITEDHEALTH GROUP INC

Neutral

Green

Neutral

No data

Neutral

No data

Amber

No data

Neutral

VERALTO CORP

No data

Neutral

No data

Neutral

VISA INC CLASS A

Neutral

Green

No data

Neutral

No data

Amber

Neutral

WASTE MANAGEMENT INC

Neutral

Amber

Neutral

No data

Neutral

Amber

No data

Neutral

XYLEM INC

Neutral

No data

Neutral

No data

Neutral

As at date – 31/12/2023

Data sourced from third party providers, including MSCI, may be unavailable, incomplete, or inaccurate.