Transition Finance: Investing in the Transition to a Low Carbon Economy

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Daniel Kricheff
MAY 17, 2023

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Transition finance, which applies a sustainable investment strategy to some of the world’s most greenhouse gas (GHG) intensive industries, aims to provide an innovative and high impact opportunity for investors to leverage capital at scale to support the transition to the low carbon industries and technologies of the future. Transition finance does this by targeting companies and entities across the economy which have aligned their operations and business models with the decarbonization pathways established by the scientific community to achieve the targets set out in the Paris Agreement—an international treaty adopted by 196 parties at the 2016 United Nations Climate Change Conference. This note discusses the potential of transition finance as an investment opportunity and introduces MetLife Investment Management’s (MIM) Transition Strategy, a new research-driven, forwardlooking strategy to mobilize capital at scale to support the energy transition while targeting outperformance1 for fixed income portfolios.