Capital
allocation

Capital allocation

We see a compelling opportunity to direct capital toward the net zero transition. The Global Climate Equity Strategy targets companies driving or enabling this shift, using a high-conviction, research-led approach.

Stock selection is the Strategy’s core performance driver, powered by integrated ESG and equity research. We focus on:

Operations leaders – companies actively transforming their operations and value chains to thrive in a low-carbon, warmer world, identified using our proprietary Transition Risk (T-Risk) framework.
Climate solutions providers – companies generating at least 20% of revenue from products or services that mitigate or adapt to climate change.

This dual focus positions the Strategy to capture both resilience and innovation in the climate transition.

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

Strategy Summary

The Global Climate Equity Strategy is a high-conviction, actively managed approach that embodies our strongest views on the climate transition. Each company in the portfolio has been carefully selected based on a distinct climate-related investment rationale. The table below presents portfolio holdings grouped by operations or solutions classifications, SDG alignment, and the climate investment rationale.

Security Description	Holding Classification	SDG Alignment	Climate Rationale
ACCENTURE PLC CLASS A	Operations	13	As a global consulting and technology company, Accenture's most acute climate risk is from energy use and associated carbon emissions. Accenture’s Carbon Reduction Plan aims to achieve net-zero emissions by 2025 through several strategies: Enhancing energy efficiency in their offices and data centres (100% renewable electricity in their facilities already achieved). Transitioning to renewable energy sources Reducing business travel emissions by promoting virtual meetings and lower-emission travel options.
ALPHABET INC CLASS A	Operations	13	As a technology giant, Alphabet's most significant operational climate risks stem from increased costs of cooling servers and potentially enormous carbon intensive energy use. To help mitigate this, Alphabet has set an emissions target to be net-zero by 2030 across operations and value chain by reducing scope 1, 2 and 3 emissions 50% by 2030, from a 2019 base. It will then invest in nature-based solutions to offset the remaining amount of its carbon footprint. All data centres and office campuses will be on 24/7 carbon-free energy by 2030.
ASM INTERNATIONAL NV	Solution	7	The leading producer of energy efficient advanced deposition tools, a critical step in semiconductor manufacturing, which reduces the energy intensity of producing semiconductors by 15% to 40% compared to old technologies (much more reduced heating element). These chips produced using ASMI's equipment are needed in everything from renewables, to EVs and to accelerated computing (required in cloud infrastructure).
ATS CORP	Solution	13	Designer and manufacturer of automation equipment and assembly line for the EV battery pack (global leader), life sciences and food & beverage industries. These automated tools reduce the energy intensity of manufacturing in high emitting sectors.
AUTODESK INC	Solution	7	Develops and sells software to digitalise the architectural, construction and manufacturing industries workflow. The tools help to reduce construction and manufacturing waste and design more efficient buildings and products.
AXA SA	Operations	13	As an insurance and investments company, AXA has climate risks from its impacts on insurance claims and decarbonisation consequences on its asset book value. In addition to committing to net-zero greenhouse gas emissions by 2050 and setting interim targets for 2030, AXA invests significantly in green assets, and to provide 9,000 climate adaptation solutions by 2026. AXA also divests from carbon-intensive industries and implements strict underwriting policies for high-risk sectors.
BE SEMICONDUCTOR INDUSTRIES NV	Operations	7	A leading producer of advanced packaging hybrid bonding tools for the semiconductor industry. BESI's tools help improve the power consumption and energy efficiency of semiconductors by increasing electrical connections within the chips and reducing the heath used to package the chips.
CADENCE DESIGN SYSTEMS INC	Solution	13	Cadence develops software and hardware for the design of semiconductors. The software is critical in helping designers and manufacturers develop more energy efficient chips, as well as reduce waste.
CARLISLE COMPANIES INC	Solution	13	Producer of roofing and insulation products providing improved energy efficiency in buildings for its customers. We believe there is a long way to go in improving building decarbonisation across N. America, particularly within commercial buildings and roofs which can impact building efficiency by 20-30%.
CRH PUBLIC LIMITED PLC	Operations	13	CRH operates within the construction materials sub-industry, which has significant climate risk due to higher costs from carbon pricing both in terms of their significant energy usage and raw materials costs. As part of its decarbonisation strategy, CRH has a near term validated SBT, committing to reduce gross scope 1 and scope 2 GHG emissions 33.5% per tonne of cementitious product by 2030 from a 2021 base year, alongside ambitions to be net-zero across its full value chain by 2050. A good example within CRH's strategy is Clinker substitution (used in cement production). CRH is actively working to reduce clinker content in their cements and concretes by substituting with low-carbon ingredients called supplementary cementitious materials (SCMs).
DANAHER CORP	Operations	13	Providing solutions across the life sciences, biotech and diagnostics industries, Danaher plays an important role in the highly energy intensive associated pharmaceutical processes. However the company has set emissions targets of a 50.4% reduction in scope 1 and 2 by 2032, from a 2021 base. Given the potential extent of their scope 3 emissions, this can be an impactful focus of engagement.
EPIROC CLASS A	Operations	13	Epiroc is a Swedish manufacturer of mining and infrastructure equipment, which is energy intensive and services the mining industry who have their own objectives to decarbonise. To mitigate this, Epiroc has an SBTI approve target to reduce absolute scope 1 and 2 GHG emissions 50%, absolute scope 3 GHG emissions from use of sold products 50%, and use 90% renewable energy in own operations by 2030 from a 2019 base year. Epiroc has impactful emissions targets in its value chain including offering a full range of emission-free products and 50% reduction in emissions from select suppliers by 2030.
HOME DEPOT INC	Operations	13	The home improvement retailer provides a detailed breakdown of it scope 3 emissions within its CDP Disclosure, and targets a reduction from the use of sold products 25% by 2030 from a 2020 base, which should be materially impactful. This builds on their SBTi approved target on scope 1 and 2 emissions of 42% by 2030. Including their scope 3 emissions in their SBTi approved target is a potential engagement angle.
HUBBELL INC	Solution	13	Hubbell is a leading manufacturer of utility and electrical solutions. This is a grid hardening play with Hubbell helping utilities improve the grid and enable the wider adoption of renewable power as the need for a modernised, stable and strong grid increases with exponential power requirements.
LINDE PLC	Solution	13	A leading provider of industrial gases, which are used in a wide range of climate-enabling end markets, including semiconductors, manufacturing and chemicals. Linde is also at the forefront of producing more sustainable blue and green hydrogen, required for the chemicals, transport and utility sectors.
LONZA GROUP AG	Operations	13	Lonza has a significant pharma manufacturing business. Regardless of climate change, the need for drugs production will continue to increase, which can be a highly energy intensive process. Lonza are leading in decarbonising their operations with near-term SBTs to reduce scope 1 and 2 emissions intensity 50% by 2030 from a 2018 base, in addition to a 100% renewable energy ambition by 2025.
MERCK & CO INC	Operations	13	As a global health care company that delivers solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, Merck's most significant climate risk is from its supply chain which they aim to mitigate through its 10-year supplier decarbonisation strategy. Merck also has a validated SBTi to reduce absolute scope 1 and scope 2 GHG emissions by 46% and scope 3 by 30% by 2030, to help achieve carbon neutrality by 2040.
MICROSOFT CORP	Solution	13	A leading provider of cloud services which enables Microsoft's customers to decarbonise their IT infrastructure. Cloud is over 40% of Microsoft's sales and growing 20% p.a. We do acknowledge the significant energy demand from data centres which power this technology hence the additional importance we place on the leading carbon reduction targets Microsoft has: SBTi validated target of 1.5°C by 2030, source 100% renewable electricity through 2030 and by 2050 it will remove an amount of carbon equivalent to all historical operational emissions.
MOODYS CORP	Operations	13	The company demonstrate clear climate action through its ambitious emission reduction targets that capture both operations and value chain. These include SBTi validated near, long-term and net zero targets by 2025, 2030 and 2040. Moody's further commits that 60% of its suppliers will have science-based targets by 2025.
MUENCHENER RUECKVERSICHERUNGS - GESE	Solutions	13	As the world adapts to the physical impacts of climate change, the impacts of both acute and chronic changes will have increased economic value. As an adaption play in the Strategy, Munich Re has a good track record in understanding the risks presented by climate change and integrating them into its business model and pricing process. In terms of its own transition, Munich Re has a target to achieve net-zero in its assets by 2050 and net-zero emissions by 2030 with regards to its own CO2 emissions.
NVIDIA CORP	Solution	7	56% of Nvidia's FY24 revenue came from compute, which consists of its GPU computing platform mainly used in today's leading edge data centres. A GPU achieves more than 5x greater computing performance than a cluster with 80 CPU cores, hence by transitioning from traditionally CPU-led servers to now GPU-accelerated servers, the energy efficiency in these data centres rose 5x on average.
OTIS WORLDWIDE CORP	Solution	13	Energy efficient buildings not only have lower operating costs, but also maintain their value and achieve higher lease income. As such, there is a strong desire by building developers to select solutions that make buildings more efficient. Otis is benefitting from this as it manufactures energy efficient elevators and escalators. Otis also has SBTi validated targets to reduce absolute scope 1 and 2 GHG emissions 55% and scope 3 by 33% by 2033 from a 2021 base year, as well as to source 100% of factory electricity from renewable energy by 2030.
PEPSICO INC	Operations	13	PepsiCo faces high climate risks ranging from global supply chain lifecycle emissions, water scarcity and impact on agricultural production. Importantly, PepsiCo have SBT validated near-term targets which commits to reduce absolute scope 1 and 2 GHG emissions 75% and scope 3 GHG emissions 40% by 2030 from a 2015 base year. Additionally, the company has a strong strategy to reduce scope 3 emissions by focusing on agriculture, packaging and third-party transportation and distribution.
PROCTER & GAMBLE	Operations	13	Significant value chain emission at risk of carbon pricing risks alongside acute physical risks (severe weather/water stress) are the main climate risks for P&G. Hence the importance of P&G going beyond their SBTi validated target covering only scope 1 and 2 emissions of 63% reduction by also including a 40%-50% reduction of scope 3 emissions by 2030. P&G have also shown climate mitigating product innovation through laundry detergents to enable cold water washing to reduce energy usage as well as new hybrid disposable/reusable nappies.
PTC INC	Solution	13	PTC is a global software design company held in the Strategy. Customers of PTC can use their products to build more eco-friendly products that simplify operations, boost productivity, and cut down on waste, which we think will increase demand.
PUBLIC SERVICE ENTERPRISE GROUP IN	Solution	7	An electricity transmission and distribution operator. This infrastructure is essential to meet the growing demand to electrify the economy and reduce dependencies on fossil fuels. PSEG has a key role to play in providing products and services to support clean energy.
RELX PLC	Operations	13	RELX demonstrates strong climate action through its ambitions to be net zero by 2040. The company has a validated near-term target with the SBTi. As a data analytics company, RELX also faces downstream opportunities from client demand for its services to help adapt to the consequences of a warming planet, how to decarbonise, or risks/opportunities presented by decarbonisation - Relx's share of citations in environmental science represented over 50% of the total (results from Scopus).
SCHNEIDER ELECTRIC	Solution	7	Manufactures critical products for the electrical sector helping to drive energy efficiency in data centres, buildings and power grid infrastructure. Schneider also sells automation technology which improves energy efficiency in manufacturing. We acknowledge the energy intensive processes currently in product, hence the importance of Schneider having a net zero target across entire value chain by 2050.
SIEMENS N AG	Solution	7	Siemens manufactures critical products for the electrical sector - helping to drive energy efficiency in data centres, buildings and power grid infrastructure. Siemens has a significant automation business and it is also exposed to industrial manufacturing software and simulation. We acknowledge the energy intensive processes currently in product, hence the importance of Schneider Siemens having an SBTi validated target to reduce scope 1 and 2 emissions by 50% and scope 3 by 15% by 2030.
T MOBILE US INC	Operations	13	T-Mobile's climate risks mainly relate to carbon intensity of data centres, cooling of data centres and water stress on semiconductor output, in addition to physical risks affecting operations and customers. Pleasingly, T-Mobile has SBTi validated net zero targets across its value chain by 2040 from a 2020 base year. Near-Term targets include reducing absolute scope 1, 2 and 3 GHG emissions 55% by 2030 from a 2020 base year. Long-Term targets include reducing absolute scope 1, 2 and 3 GHG emissions 90% by 2040 from a 2020 base year.
TAIWAN SEMICONDUCTOR MANUFACTURING	Solution	7	TSMC is a cornerstone of the global semiconductor industry as the world’s largest pure-play semiconductor foundry by offering the industry’s leading process technologies and a portfolio of design enablement solutions. Semiconductors electrical properties and behaviours can be controlled by adding small amounts of impurities – known as doping. Different impurities and concentrations produce different effects, therefore by controlling doping, the way electrical currents move through semiconductors can be controlled. For this reason, semiconductors are a key component within photovoltaic cells, batteries, power trains and EV’s to name a few, all of which will play a crucial role in the decarbonisation of the energy and transport sector – all crucial to achieve net zero targets. TSMC also has ambitions to achieve net-zero emissions by 2050, an important target given energy intensity of their operations.
TRANE TECHNOLOGIES PLC	Solution	13	Even if we were to achieve the Paris Agreement of 1.5 degrees, by definition the world will be warmer. As urban areas in particular get warmer, the need for air conditioning solutions increases. Enter Trane Technologies, a Heating, Ventilation and Air Conditioning (HVAC) company. Importantly for its own operations energy dependency, Trane has SBTi validated short and long-term net zero targets for 2030 and 2050 respectively.
UNITED RENTALS INC	Solution	13	United Rentals is a manufacturing equipment rental company. From an energy efficiency and circular economy Solutions angle, leasing is well positioned to support the ‘circular economy’ as the leasing company retains ownership of an asset throughout its lifecycle. At the end of the asset’s economic life, the leasing company recovers the asset for remanufacturing, maximising its economic utility and minimising its environmental impact. Ultimately, the circular economy could create an ecosystem in which the most environmentally sustainable products are also the most economical. United Rentals also targets reducing scope 1 and 2 emissions intensity 35% by 2030, from a 2018 base. The target in 2023 was expanded to include scope 3 emissions from third party haulers.
UNITEDHEALTH GROUP INC	Operations	13	United Health has committed both its near-term and net zero targets to the SBTi. Getting those validated forms part of our engagement approach for the company. Emissions targets includes a 60% reduction in scope 1 and 2 emissions by 2030 and to reach operational net zero by 2035. United Health also have a target to invest in and source 100% of their global electricity demand from renewable sources by 2030.
VERALTO CORP	Solution	13	Veralto generates 60% of its revenue from the adaptive solution theme, Water treatment. The company is innovating existing services within the water sector helping adapt to the adverse impact of climate change as water stress and shortages are expected to increase as temperatures rise. As the company operates in over 130 global locations it is well positioned to aid the adaption to this impact. The company has set targets focusing on scope 1 and 2 emission reduction by over 50% by 2033 from a 2023 base, demonstrating ambition to decarbonise operations.
VISA INC CLASS A	Operations	13	Energy usage and cooling of servers in data centres are amongst Visa's highest climate risks. Pleasingly, Visa has SBTi validated near terms targets including to reduce absolute scope 1 and 2 emissions 50% and absolute scope 3 emissions 42% by FY2030 from a FY2020 base year. Visa also has ambitions to be net-zero by 2040, yet to be approved by the SBTi - a good area for engagement.
WASTE MANAGEMENT INC	Solution	13	A Solutions holding within the portfolio given its technology exposure to recycling and biofuels. Biogas is a more environmentally friendly renewable energy source produced by the breakdown of organic matter such as food scraps and animal waste. It can reduce GHG emissions by about up to 80% compared to fossil fuel-based fuels. Recycling technology can help mitigate climate change by limiting both the amount of raw materials used and waste going into landfills. - Recycling over the next 30-years could reduce emissions by up to 6 gigatons of carbon dioxide - equivalent to taking over 1 billion cars off the streets for one year. - Currently, c.8% of total oil consumption goes towards creating plastics – if current trajectory in plastic use persists, plastics will account for 20% of oil consumption by 2050 - hence the climate importance of a more circular economy and plastic reduction.
XYLEM INC	Solution	13	Xylem produces water and wastewater pumps, as well as water treatment and testing equipment. Xylem also owns Evoqua Water, who build water systems and provide technologies such as filtration, separation, disinfection, wastewater technologies. Climate change will impact global water resources in multiple ways. We are already observing changes in precipitation patterns; at the acute level these are causing more floods and droughts, at the chronic level they will be changing the ecosystems due to changes in long term water cycles. In addition, we are seeing the loss of glaciers which will affect downstream communities’ dependant on their meltwaters, whilst also contributing (alongside ice sheet loss) to sea level rise which in turn causes more flooding and saltwater intrusion which will affect agricultural production. This is all against the background of increasing demand and increasing water scarcity (due to pollution and over abstraction). It is estimated that by 2030 global demand will outstrip supply by 40%.

As of: 31/12/2024
The information provided is for illustrative purposes only and should not be construed as an investment recommendation.

This table provides a snapshot of portfolio holdings assessed against key climate-related performance indicators. The aim is to support transparent tracking of progress and identify areas where further engagement or action may be needed.

2024 Data Summary Table		Global Climate Equity Strategy			MSCI ACWI
2024 Data Summary Table		Dec 2022	Dec 2023	Dec 2024	Dec 2022	Dec 2023	Dec 2024
Fossil Fuels	Percentage weight of companies with fossil fuel exposure¹	0	0	5.3	8	6.9	14.5
Carbon Emissions	Weighted average intensity (tCO²e/$M Sales)	89.4	96.9	111.1	140.9	128.0	113.6
Carbon Emissions	Carbon footprint (tCO₂e/$M invested)	22.2	18.2	25.5	105.8	101.6	41.76
Climate Governance	Percentage of companies with a CDP score >B	84.4	65.8	68.4	39.9	37.2	45.1
Climate Governance	Percentage of companies with SBTi ambitions²	71.1	71.0	78.9	29.0	31.8	35.8
Stewardship	Voting Percentage³	100	96	97⁴

¹ Fossil fuel exposure defined as companies with an industrial tie to fossil fuels (thermal coal, oil and gas), in particular reserve ownership, related revenues and power generation.

² SBTi ambitions includes validated SBTs or commitment to set validated SBTs.

³ The percent of Strategy holdings we have exercised our voting rights on.

⁴ Due to conflict of interest, we were unable to vote against all holdings as the GCE had investments in Aviva Investor Funds.

As of date: 31/12/2024
Source: Aladdin & MSCI

Data Consistency Note
This year, we updated our data aggregation methodology and introduced new input sources for all fossil fuel-related data. While the most recent data reflects these enhancements, historical figures for 2022 and 2023 have been retained as previously reported. As a result, some year-on-year comparisons may be affected.
Separately, we have revised certain climate governance data points from previous years to correct inaccuracies identified during our internal review. These changes reflect improved data validation rather than methodological updates. We are committed to maintaining the highest standards of data quality, and these adjustments support greater accuracy, consistency, and transparency across our reporting.