Seeking climate-resilient growth in a core fixed income allocation
Climate change is reshaping the investment landscape. As the world transitions to a low-carbon economy, we believe the risks and opportunities tied to climate are becoming central to creditworthiness and long-term value creation.
We believe markets have not fully priced in the impact of decarbonisation or the physical risks of climate change. This creates a compelling opportunity: to invest in issuers with credible climate strategies who are better positioned to navigate — and benefit from — this transition.
Aviva Investors has a long history of credit and sustainable investing, spanning decades. The Aviva Investors Global Climate Credit Strategy is an actively managed strategy focused on global investment-grade bonds. Over the long term (5 years or more), it aims to outperform the Bloomberg Global Aggregate Corporate Index gross of fees by investing in companies that are effectively addressing climate change and aligning with a net zero emissions pathway by 2050.
Why invest?
Our climate-focused investment grade credit strategy has a dual mandate of seeking financial performance and climate outcomes.
This strategy serves as a long-term fixed income anchor, offering exposure to a growing set of climate-aligned investments. It helps mitigate transition risk and has seen strong demand among net zero-focused investors—enhancing liquidity and potentially narrowing spreads for climate-conscious issuers.
Generate income and long-term capital growth
We seek to capture diversified, excess returns from across the global investment grade universe with a focus on maximising risk-adjusted returns and enhanced capital preservation.
Alignment with a net-zero emissions pathway by 2050
The strategy solely targets companies holding Science Based Targets (SBTi’s), or equivalent, by 2040, aligning the portfolio with a net-zero emissions pathway by 2050.
Investment philosophy
We believe climate-focused credit offers a compelling opportunity to deliver consistent, long-term outperformance within a core investment grade allocation — while supporting companies transitioning to a low-carbon economy.
Our strategy invests in a broad universe of issuers, focusing on those actively addressing climate change through mitigation, adaptation, or resilient business transformation. We also allocate to green, social, sustainability, and sustainability-linked bonds* that fund positive environmental and social outcomes.
The following are key strengths in our approach to Global Climate Credit investing in the Strategy:
Bespoke climate approach
Our bespoke climate filter defines our investment universe, categorising bonds into solutions, and those operationally aligned and demonstrating climate integrity. This approach seeks to identify opportunities for diversified alpha from a broad opportunity set.
Robust portfolio construction
We aim for enhanced capital preservation with disciplined risk management which avoids an overreliance on beta. We invest with a high conviction approach, anchoring portfolios in resilient, income-generating credits while tactically capturing capital appreciation opportunities.
Targeted engagement
We seek to drive meaningful change through our firm-wide Climate Stewardship activities and our portfolio engagement programmes. We encourage our companies/issuers to adopt Science Based Targets, targeting 100% by 2040, aiming to align the strategy to a Net-Zero emissions pathway by 2050. Where there is insufficient progress, escalating action will be taken which may ultimately lead to divestment from those companies that fail to meet our minimum expectations.
*Green, Social, and Sustainability Bonds: Bonds funding projects with positive environmental, social, or sustainability impacts.
Sustainability-Linked Bonds: Bonds tied to achieving key performance indicators that promote positive environmental, social, or sustainability outcomes.
Investment insights
Investment thinking that brings together the collective insight of Aviva Investors’ teams from across the globe on the key themes influencing markets.
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Bond Voyage: A journey into fixed income
12 Dec. 2025
In the last Bond Voyage edition of 2025, we examine the vast amounts of capital being deployed to build new high-capacity data centres and how the expenditure is being funded in the bond markets.
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Rethinking risk in EMD: The great inversion on emerging markets
28 Nov. 2025
Market and economic trends are challenging the idea that emerging market (EM) bonds should trade at a discount to developed economy debt.
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Bond Voyage: A journey into fixed income
9 Oct. 2025
In this month’s Bond Voyage, we introduce SHIELD – the downside protection framework used by our fixed income division. SHIELD is designed to ensure our portfolios remain resilient in challenging market conditions while maintaining capital efficiency.
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From niche to core: Asset-based finance emerges as a driving force as private debt markets continue to evolve
7 Oct. 2025
Asset-based finance is capturing the attention of institutional investors – from pension schemes to insurers – thanks to its diverse risk-return drivers and its growing role as a strategic building block in investors’ portfolios.
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Bucking the trend: Emerging market debt shows its mettle amid wider market turbulence
19 May 2025
Emerging-market debt has proved a rare bright spot so far this year as investors struggle to assess the impact of US political upheaval. In this article, Carmen Altenkirch and Nafez Zouk advance reasons why the market is well placed to weather ongoing market turbulence.
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Sovereign engagement: Driving positive change while delivering long-term value
14 May 2025
Investor engagement with governments on their climate commitments can be a powerful complement to other forms of stewardship. It can also help investors identify opportunities and mitigate risks, says Thomas Dillon.
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Bond Voyage: A journey into fixed income
6 May 2025
In May, our EMD team discusses the most effective way to manage fixed income through episodes of heightened uncertainty.
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Future proofing fixed income
16 Apr. 2025
Advances in data analytics and AI-driven insights are changing the landscape in fixed income investing, and the pace of change in innovation and technological adoption is remarkable.
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Bond Voyage: A journey into fixed income
10 Mar. 2025
This month, our fixed income teams discuss the boom in hybrid issuance and weigh up the risks and opportunities of potential tariffs, interest rate moves and fiscal dynamics.
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Bond Voyage: A journey into fixed income
10 Feb. 2025
As we negotiate an uncertain landscape, our fixed income teams reflect on potential sources of resilience.
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Bond Voyage: A journey into fixed income
13 Jan. 2025
With a new US president poised to take office, central banks diverging and ongoing political uncertainty, how are the key fixed income asset classes positioned for the year ahead?
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Sovereigns’ state: Analysing the new challenges facing global sovereign bonds
13 Dec. 2024
The expected policies of a Republican administration in the US bring added uncertainty to the global growth cycle. Steve Ryder and Daniel Bright examine the probable impacts of a world with more tariffs and political strains.
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Bond Voyage: A journey into fixed income
9 Dec. 2024
This month, we explore how US Treasuries are taking a breath, why 2025 could be the year of carry for high yield, what increasing dispersion means for emerging markets, and how surging M&A activity could affect investment-grade bonds.
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Bond Voyage: A journey into fixed income
4 Nov. 2024
This month, our fixed-income investment teams discuss US elections, IMF meetings, US versus European high yield, managing declining rates for cash, and what the future might hold in store for gilts.
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Climate Stewardship 2030 programme
29 Apr. 2025
Designed to support our holistic stewardship approach, Aviva Investors adopted its Climate Stewardship 2030 programme (CS30) in 2024.
House View
No one can predict the future. But our quarterly House View sets out the collective wisdom of our investment teams on the current state of global markets – and where they might be heading.
Key risks
Investment risk and currency risk
The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.
Credit and interest rate risk
Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.
Illiquid securities risk
Some investments could be hard to value or to sell at a desired time, or at a price considered to be fair (especially in large quantities). As a result, their prices can be volatile.
Counterparty risk
The strategy could lose money if an entity with which it does business becomes unwilling or is unable to meet its obligations to the strategy.
Derivatives risk
Investments can be made in derivatives, which can be complex and highly volatile. Derivatives may not perform as expected, meaning significant losses may be incurred.
Sustainability risk
The level of sustainability risk may fluctuate depending on which investment opportunities the Investment Manager identifies. This means that the strategy is exposed to Sustainability Risk which may impact the value of investments over the long term.
Currency risk
The strategy is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.
Global climate credit team
Our Global Climate Credit strategy is headed up by Thomas Chinery and Justine Vroman, both experts in climate, stewardship and sustainable investing. The team benefits from the expertise of Aviva Investors’ unified fixed income platform of over 80 experts through cross-capability global collaboration.
Justine Vroman
Senior Portfolio Manager
Thomas Chinery
Senior Portfolio Manager
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Fixed income
Fixed income is an indispensable building block for meeting a variety of investment goals, including income, inflation protection, liability management and capital appreciation.