Stockholm (HedgeNordic) – Invesco and the Fourth Swedish National Pension Fund (AP4) have teamed up to create a practical guide for investors aiming to align their portfolios with Paris Agreement’s climate goals. The guide offers a detailed comparison of two key metrics in climate-aligned investing – Implied Temperature Rise (ITR) and Carbon Budget Divergence – explaining their methodologies, applications, and respective advantages and limitations.

“We are delighted to work together with AP4 on this important report, which is a testament to our ambition to share sustainable investment insights widely,” says Daniel Eskilsson (pictured right), Senior Sales Manager at Invesco. “It has allowed us to combine our expertise and resources to deliver a practical and very topical guide for climate-conscious investors in relation to forward looking carbon metrics.” 

The report outlines different approaches to identifying paths towards carbon neutrality and specifically highlights the potential impact of integrating climate alignment in portfolio construction. 

“There is a lack of guidance and knowledge on how to address temperature alignment in portfolios,” emphasizes Julia Ripa (pictured center), Senior Analyst at AP4. “This report therefore acts as a tool for investors to navigate different types of data sets and how the choice of measurement method affects the portfolio’s alignment with the Paris Agreement.” 

Read the full report here.