We recently marked a decade since the launch of our Plus funds, a family of climate-aware equity strategies that now manage around €12 billion on behalf of European clients. In April 2016, we launched Storebrand Global Plus, seeking to deliver an equity portfolio that could capture broad exposure to developed market equities alongside climate and sustainability preferences with low tracking error. Two months later, we launched a sister fund to do the same for emerging market equities, Storebrand Emerging Markets Plus.
Ten years later, we believe the strategy has delivered. Our investment objective has remained consistent over the past decade, albeit the funds have evolved in line with changing climate science and improving data. Today, Global Plus and Emerging Markets Plus together manage €11.5 billion, and they have been joined by smaller siblings that deliver the same approach for clients seeking climate-aware exposure to European and US markets.
The 10-year anniversary provides a useful point to reflect on what we have learned over an important decade for climate change mitigation and to consider what the next period may have in store for the investment strategy.
Balanced approach
Climate-aware equity investing barely existed ten years ago, consisting mostly of screened-index products, exclusion-only mandates and early climate benchmarks that baked climate data into market weights. Following the 2015 Paris Agreement and a desire from clients to align their equity portfolios with its important goals, our challenge was to find a framework that could simultaneously provide broad market exposure and genuine climate preferences, while keeping investment choices visible rather than buried inside an outsourced climate index.
We created the Plus framework through the primary lens of portfolio construction. Starting from mainstream MSCI World and MSCI Emerging Markets indices, we then apply a defined set of climate principles as constraints and then optimise for tracking error, rather than maximising any single objective. Our goal is to construct portfolios that provide broad equity market exposure and reflects these climate principles, while staying within a 1–2% tracking-error budget.
The tracking-error budget is a core input into portfolio construction. The optimiser is designed to keep the funds close to their parent MSCI benchmarks while allowing active positions where they are required by the climate framework. Fossil fuel exclusions, climate solutions exposure, SBTi tilts and carbon-intensity reduction are intended sources of active risk. Country, sector, currency, size, style and stock-specific exposures are controlled so that the funds do not become unintended factor or thematic bets – a key reason why the funds are designed to sit as core equity allocations rather than as satellite climate portfolios.
The framework required developing our own constraint set rather than licensing it from an index vendor, managing the portfolios in-house against the parent benchmarks and resisting pressure to centre reporting on a single emissions number. An important lesson from the past decade is that carbon data becomes more useful once you stop treating it as the sole target. Despite the inherent logic, simply minimising portfolio emissions, particularly in emerging markets, is flawed. A battery manufacturer in China, for example, operates in a market where fossil fuels remain dominant, meaning its scope 1 and 2 emissions are high despite its products replacing fossil capacity elsewhere in the energy system (scope 3 emissions).
More broadly, companies whose products enable electrification – batteries, solar panels, grid equipment, rolling stock – often operate in carbon-intensive power systems. We believe a portfolio optimised purely to minimise reported emissions risks penalising such companies unfairly and potentially constraining capital flows from businesses that are key to the energy transition.
Although carbon intensity reduction is important – the Global Plus fund’s is 60% lower than the index and the EM Plus is around 68% below benchmark – we treat it as one input alongside climate-solutions exposure, green revenues and science-based-target alignment. This balanced approach means that the portfolios score better than their respective benchmarks on each of these key climate metrics[1].
Strategy evolution and performance
We have evolved our methodology in stages over the past ten years to ensure portfolio continuity while adapting to a changing environment, with several key milestones:
- 2016: At inception, we focused the portfolios on fossil-fuel exclusions and delivering low-carbon tilts.
- 2017: We added the climate solutions allocation and widened fossil exclusions.
- 2019–2020: We integrated green revenue data, science-based target coverage and EU Taxonomy assessments.
- 2025: We introduced forward-looking signals and widened our lobbying screen.
Retaining the framework in-house means that we have been able to iterate continuously without needing to launch a new index with negative repercussions and costs for clients. Importantly, the framework has been tested against real market conditions over a full decade, including major developments in data quality, climate science and regulation.
Since inception, Global Plus has performed in-line with the MSCI World Index, lagging the index by 0.16% on an annualised basis, while EM Plus has outperformed the MSCI Emerging Markets Index by 0.98% (both gross of fees). The slight underperformance of Global Plus reflects periods when fossil fuel companies outperformed, while EM Plus’s outperformance reflects emerging markets' exposure to strongly performing climate solutions manufacturing companies; both effects are central to the framework's design and we believe both will provide long-term performance tailwinds as the energy transition gathers pace.
Importantly the fund has delivered these solid financial returns while achieving superior climate metrics relative to the benchmark in terms of carbon emissions and intensity, portfolio green revenues and SBTi coverage.
Complementary climate solutions exposure
While excluding fossil fuel companies is an important part of aligning the investment strategy with the Paris Agreement, real economy decarbonisation occurs through physical investment in climate solutions. Another important insight from the past ten years is that applying the same climate solutions framework to two different markets – developed and emerging – produces strikingly different portfolios.
This reflects that the transition itself is geographically distributed; in developed markets, the climate solutions sleeve tilts toward downstream services and systems that underpin transition infrastructure (e.g. energy efficiency, recycling, water infrastructure and grid modernisation), whereas the solutions sleeve in emerging markets is dominated by upstream manufacturing (e.g. batteries, solar panels, grid equipment, rolling stock, and renewable infrastructure), particularly concentrated in China. For asset owners, the implication is clear – holding both funds provides full broad coverage of the solutions value chain and transition exposure.
The next decade
The tenth anniversary of the Plus funds has coincided with a spike in oil prices due to conflict in the Middle East and several negative reversals of climate policies, particularly in the US – geopolitical headwinds that have blown against a backdrop of unrelenting global warming.
While acknowledging these uncertainties, particularly in the short-term, we believe that the Plus strategy remains well-positioned for the energy transition. Climate solutions companies continue to perform strongly, while events in the Middle East have underscored the longer-term need for energy security and locally-produced electricity. With structural demand drivers from growing AI and data usage alongside decarbonisation, we believe the long-term rationale for the Plus framework remains strong, while recognising that short-term policy and commodity-market shocks can create periods of relative volatility.
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Information as at 30/06/2026 unless stated.
[1] As at 31/03/2026. Carbon emissions: Scope 1&2 (Source: Trucost). Climate solutions defined by Storebrand PM as pure-play companies with >50% revenues or market cap from climate solution activity. FTSE Green Revenues (%). Companies with externally verified Science Based Targets (SBTi) 2C or lower.