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  1. JPMorgan Climate Change Solutions ETF

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JP Morgan | Climate Change Solutions

T3MP

JPMorgan
Climate Change
Solutions ETF

The big picture
The opportunity
The process
The fund in depth

Invest actively in climate change solutions

The scale of the climate challenge is clear. Temperatures have already risen by 1° from pre-industrial levels and are on track to rise 3° by the end of the century. Energy demand to support the world’s expanding population is only set to grow. The global response will require vast investment in climate solutions.
50%
Expected increase in global energy demand by 2050
Source: OECD estimate as of December 2020
9bn
Forecast global population by 2050, from 7 billion today
Source: OECD estimate as of December 2020
$ 140tn
Required investment by 2050 to decarbonise energy supply
Source: Estimate from UBS energy transition research paper as of June 2021

Climate innovation creates widespread opportunity

Companies around the world are rising to the challenge with new solutions to address the drivers of climate change. For investors, this era of innovation is opening up opportunities across industries and geographies.

Sustainable Food & Water
Sustainable Construction
Sustainable Transport
Renewables & Electrification
Recycling & Re-Use
The theme

Investing in companies developing less carbon-intense forms of agriculture, sustainable food, or clean water.

The opportunity

Food is a key driver of emissions, and water stress is impacting the globe.

us flag

Deere & Co.
Leader in agricultural, construction and forestry machinery

Square feet of facilities where they operate

80 million

Leadership with operation

100 countries

Material recycled through remanufacturing

28 million lbs

Reduction in greenhouse gases since 2017

19%

Farm equipment… with environmental leadership

Company is uniquely positioned to benefit on the next step in farming productivity with its investment in machine learning and a digital platform far ahead of competitors.

Combining heavy machinery with heavy duty equipment can provide improved crop yields with lower water and chemical usage and a lower input cost for farmers.

A richer harvest and a smaller carbon footprint

ExactEmerge™ technology allows for precise seed placement at double the speed – reduces waste and provides optimal crop growth

The new model X Series Combine will average 45% more harvesting capacity across crops using 20% less fuel.

Source: Company website. May 2021, The example above included solely to illustrate the investment process and strategies which have been utilized by the manager. It should not be assumed that investments in the portfolio including the example above have been profitable. Please note that the investment is not necessarily representative of future investments that the manager will make. There can be no guarantee of future success.

The theme

Investing in companies investing in sustainable forms of transportation across automobiles, trains and planes.

The opportunity

Electric vehicle sales have increased dramatically over the last decade.

us flag

General Motors
Transportation for a future that is not only electrifying but also sustainable

Metric tons of CO2 avoided through purchase of GM EVs

950,000+
In 2020

Operational reduction in carbon intensity

31%
Since 2010

Planned new EV model launches

30
By 2025

Planned spending on EVs

$35 billion
By 2025

Ahead of peers in electric offerings

US electric vehicles on the road
Battery & hybrid cumulative sales

Graph showing US Electric Vehicles on the Road, Battery & hybrid cumulative sales.

Ahead of peers in electric offerings

  • Company is among the leaders in the transition to electric vehicles with a strong portfolio of battery and powertrain technologies
  • Industry leader in U.S. National Zero Emissions Vehicle (NHEV) program
  • Company has made a strong commitment to eliminate all tailpipe emissions by 2035 and use all renewable energy in manufacturing process

Source: Company website. November 2021, The example above included solely to illustrate the investment process and strategies which have been utilized by the manager. It should not be assumed that investments in the portfolio including the example above have been profitable. Please note that the investment is not necessarily representative of future investments that the manager will make. There can be no guarantee of future success.

The theme

Investing in companies developing clean energy such as wind or solar, across the full production chain, and enabling electrification across the economy

The opportunity

Clean energy costs have come down and the investment required is high.

euro flag

Schneider Electric
A leader in energy and automation solutions

Total energy spend managed on clients' behalf

€30+ billion

CO2 tracked on clients behalf

128 million
Metric Tons

Client savings

€2.2 billion
Across 625+ contracts

2025 key impact goal

80%
Green revenues

Digital solutions to drive carbon reduction

Enable consumers and businesses to make the most of energy and resources through digital and automation solutions.

A proprietary interoperable open architecture and platform allows for enhanced safety, efficiency and sustainability for homes and businesses. Achieved through advances in the internet of things, cloud and analytics.

A partner in climate change action for industry

Company launched Climate Change Advisory Services in January 2021, a first of its kind service to share Schneider’s expertise in delivering solutions on sustainability and climate action.

Consultants are well versed on sustainability initiatives and many clients are listed on the STOXX® Global Climate Change Leaders Index.

Source: Company website. May 2021, The example above included solely to illustrate the investment process and strategies which have been utilized by the manager. It should not be assumed that investments in the portfolio including the example above have been profitable. Please note that the investment is not necessarily representative of future investments that the manager will make. There can be no guarantee of future success.

The theme

Investing in companies developing less carbon-intense forms of construction, including energy efficiency of buildings

The opportunity

The buildings and construction industry needs to decarbonise three times faster over the next 30 years versus the previous 30 in order to reach net zero by 2050.
Source: McKinsey: Takeaways from COP26

euro flag

Signify
At the forefront of climate action lighting

Carbon neutral today

100%

Revenue from sustainable products

84%

Renewable energy

100%

World electricity used for lighting

13%

Brighter lives, better world

With energy savings of up to 80% and the potential to save 100 megatons of GHG emissions per year, LED and connected lighting is a quick and easy win for sustainable renovation.

Leader in solar lighting innovation

  • Solar lighting leads to energy savings of up to 75%
  • Solar panels last up to 30 years
  • Off-the-grid communities can access 24/7 light

Commitment to climate action lighting

  • Aim to double the pace of the Paris Agreement over the complete value chain.
  • Signify Green Switch launched as a response to meet the European Green Deal’s five stated goals.

Case study: Helping remote communities in India

  • Philips LifeLight, a portable solar-powered lantern designed for regions with limited access to electricity
  • Complemented by the installation of approximately 84,000 solar streetlights in the country

Source: Company website. May 2021, The example above included solely to illustrate the investment process and strategies which have been utilized by the manager. It should not be assumed that investments in the portfolio including the example above have been profitable. Please note that the investment is not necessarily representative of future investments that the manager will make. There can be no guarantee of future success.

The theme

Investing in companies developing technologies to reduce waste, including equipment and materials recycling.

The opportunity

The amount of waste is increasing and we do not recycle enough.

euro flag

TOMRA
Market leader in the reverse vending market and the use of sensors in resource management

Drinks containers

1.4 trillion+
Produced every year

Collected every year by Tomra

40 billion
Drinks containers

Reverse vending machines installed

80,000
Globally

2020 CO2 saved by machines installed by Tomra mining

155,607,375
Metric tonnes

A world with no concept of waste

Proper handling of used packaging conserves precious resources like energy, water and crude oil – also reducing GHG emissions.

Deposit return program encourages consumers to make better choices in terms of discarding their single-use plastics and promoting a sustainable circular economy.

Beyond reverse vending

Technology has applications beyond reverse vending:

  • Food – sensor based sorting for food industry to reduce waste.
  • Sorting recycling – use of infrared sensors for waste sorting.
  • Mining sites – sensors can reduce energy consumption by up to 15% and water use by 3-4 cubic meters per ton of ore.

Source: Company website. May 2021, The example above included solely to illustrate the investment process and strategies which have been utilized by the manager. It should not be assumed that investments in the portfolio including the example above have been profitable. Please note that the investment is not necessarily representative of future investments that the manager will make. There can be no guarantee of future success.

Designed by data.
Refined by research.

Identifying companies with the ability to develop, deliver and scale solutions to the climate challenge demands active insight. JPM Climate Change Solutions ETF (T3MP) combines expertise in artificial intelligence and data science with analyst research to distil a vast investment universe into a high-conviction portfolio of companies with the potential to shape our world.

1.
Broad global
universe

+ -

The process starts with the more than 2,900 companies in the MSCI All Country World Index.

2.
Screening for
exclusions

+ -

Securities that do not conform with minimum standards of business practice – based on ESG principles and international norms – are excluded.

THRESHOLD EXCLUSIONS
FULL EXCLUSIONS
VALUES BASED
Conventional weapons > 10%
Tobacco production > 5%
Thermal coal > 30%
Revenue from connection to the nuclear weapons industry > 2%
Controversial weapons
White phosphorus
Nuclear weapons
NORMS BASED
Severe violations of
UN Global Compact

Read the full exclusion policy

3.
Identifying thematic
relevance

+ -

ThemeBot natural language processing tool scans hundreds of millions of data sources to identify companies most exposed to the climate solutions theme.

  • Construct mind map
    Uses Natural Language Processing (NLP) to identify words that relate to the theme

  • Analyse big data
    Rapidly analyses hundreds of millions of data sources: company profiles, research, regulatory filings and news articles

  • Rank securities
    Considers both textual relevance and revenue attribution to determine most theme relevance

Who? Quantitative Solutions, an integrated quantitative research and portfolio management team focused on factor investing, machine learning and data analytics.

Why? Breadth, transparency and speed: 2,900 companies covered, with full look-through into analysis generated in seconds.

4.
Demonstrating
sustainability

+ -

Portfolio managers partner with sustainable investing team to define a clear sustainability thesis for each security, using a framework that combines top-down sustainability themes with bottom-up security evaluation.

Who? Thematic portfolio managers from Quantitative Solutions and International Equity Group, with verification from dedicated sustainable investing team.

Why? To ensure capital is allocated efficiently towards activities that generate positive sustainable outcomes.

See the framework

5.
Evaluating the
business

+ -

Global research analysts assess the ESG profile of each business, and formulate a strategic classification on three criteria:

  • Economics: Does the business create value for shareholders?

  • Duration: Can this value be sustained?

  • Governance: How will governance impact shareholder value?

Who? >90 sector specialists who together conduct over 5000 company meetings per year.

Why? To identify quality/growth companies, supported by solid corporate governance and sustainability practices.

6.
Assessing
value

+ -

Analysts use their research to formulate normalised earnings forecasts for the potential portfolio companies and generate rankings.

Who? >90 sector specialists.

Why? To ensure each security comes at a price we are willing to pay.

7.
Building the
portfolio

+ -

The portfolio management team constructs a portfolio of 60-120 securities, unconstrained by market cap, sector or region, investing in companies with market-leading positions providing solutions to address climate change.

Who? Thematic portfolio managers from Quantitative Solutions and International Equity Group

See the top holdings

Capture climate change solutions actively

Tap into cross-sector innovation with an active ETF investing in companies rising to the climate challenge.
Discover T3MP >
This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. As the product may not be authorised or its offering may be restricted in your jurisdiction, it is the responsibility of every reader to satisfy himself as to the full observance of the laws and regulations of the relevant jurisdiction. Prior to any application investors are advised to take all necessary legal, regulatory and tax advice on the consequences of an investment in the products. Shares or other interests may not be offered to or purchased directly or indirectly by US persons. All transactions should be based on the latest available Prospectus, the Key Investor Information Document (KIID) and any applicable local offering document. These documents together with the annual report, semi-annual report, instrument of incorporation and sustainability-related disclosures, are available free of charge in English from JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, your financial adviser or your J.P. Morgan Asset Management regional contact or at www.jpmorganassetmanagement.ie. A summary of investor rights is available in English at https://am.jpmorgan.com/lu/investor-rights. J.P. Morgan Asset Management may decide to terminate the arrangements made for the marketing of its collective investment undertakings. Units in Undertakings for Collective Investment in Transferable Securities (“UCITS”) Exchange Traded Funds (“ETF”) purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units and may receive less than the current net asset value when selling them. In Switzerland, JPMorgan Asset Management (Switzerland) LLC, Dreikönigstrasse 37, 8002 Zurich, acts as Swiss representative of the funds and J.P. Morgan (Suisse) SA, 8 Rue de la Confédération, 1204 Geneva, as paying agent of the funds. JPMorgan Asset Management (Switzerland) LLC herewith informs investors that with respect to its distribution activities in and from Switzerland it receives remuneration which is paid out of the management fee as defined in the respective fund documentation. Further information regarding this remuneration, including its calculation method, may be obtained upon written request from JPMorgan Asset Management (Switzerland) LLC.

This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.
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