Candriam Sustainable Equity Climate Action I USD Acc

Fund objective

Principal assets traded: Shares of mid and large cap companies throughout the world that target to be the future leaders of climate change actions. Investment strategy: The fund seeks to achieve capital growth by investing in the principal assets traded and selecting companies involved in activities which enable the mitigation of, or the adaptation to climate change. In this context, the benchmark below will be used as investment universe. The management team makes discretionary investment choices on the basis of an economic/financial analysis process as well as on a Candriam’s proprietary analysis of Environmental, Social and Governance (ESG) considerations, both indicative of risks and long-term opportunities, along with a specific screening based on climate change thematic considerations. Firstly, investment ideas are screened and scored. All selected companies have been identified as a provider of direct and tangible solutions to tackle climate change and/or global warming. Secondly, each company is assessed through a financial framework according to five fundamental criteria: quality of management, business growth, competitive advantage, value creation, and financial leverage. Issuers are evaluated on the basis of an analysis of the business activities (how companies' activities address the key sustainable challenges…) and of the stakeholders (how companies manage material stakeholder issues including employees, environment…). In addition, issuers deemed to prone to controversies are also excluded. The fund’s sustainable investment objective is to invest in companies and sectors presenting a significant impact on ability to mitigate climate change or adapt to its physical consequences. Some of the companies identified as bringing solution to climate change might achieve this whilst at the same time themselves emitting a certain amount of greenhouse gases. Essential for this strategy is to consider not just individual companies’ carbon emissions, but their overall contribution to the Paris Agreement objectives through their alignment with a 2 degree global warming low carbon scenario. More specifically, the Fund aims to achieve an overall portfolio alignment with a temperature scenario equal or lower than 2.5 degrees (2 degrees by January 1st 2025). In line with this objective, the Sub-Fund aims to invest a higher share of its assets in high stake companies than the Benchmark. High stake companies are defined by the EU Climate Benchmark regulation as those belonging to one of the sectors considered to play the biggest role in achieving the Paris Agreement objectives. This analysis and selection process is enriched by the results of dialogs led with issuers. This investment approach will cause the fund to avoid certain issuers due to their poor contribution to attaining the sustainability objective of the Fund. Whilst the manager believes that such issuers are likely to lose out to more sustainable ones over the long term, market volatility and short term market trends could result in such issuers outperforming more sustainable ones over shorter periods. For further information, please refer to Candriam’s website and/or the prospectus. The fund may use derivative products both for investment and hedging purposes (hedging against unfavourable future financial events). The Management Company has set up a mechanism that tends to offset the carbon footprint of the Fund whose implementation has been trusted to its Belgian subsidiary, Candriam Belgium. The operating mode of the mechanism is the following: The measurement of greenhouse gas emissions (expressed in CO2 emission equivalent) by a company can be made by distinguishing three subsets ("Scopes"). Scope 1 concerns direct emissions from companies. Scope 2 concerns indirect emissions due to the activity of the company. Scope 3 concerns indirect emissions due to the use of the products sold. The carbon footprint offsetting of the Fund may be considered partial insofar as (i) Scope 3 and (ii) the exposure on money market instruments or derivatives in the calculation of carbon emissions are not taken into account. The estimation of the Funds' carbon footprint will be calculated each month in order to determine the amount of carbon credits necessary to offset the carbon emission. Candriam Belgium will ask an intermediary to offset the Fund's carbon footprint via the acquisition of certificates awarded to projects that decrease or avoid CO2 emission (Verified Emission Reduction). As part of this service and depending on the amount determined, all carbon credits acquired will be canceled, thereby materializing the compensation. The Management Company will set aside 10% of the net management fees earned (i) to support sustainability initiatives as well as (ii) to clear the carbon footprint of the Fund. For further information, please refer to Candriam’s website and/or the prospectus. Benchmark: MSCI ACWI (Net Return) The fund is actively managed and the investment approach implies a reference to a benchmark. Benchmark definition: The index measures the performance of the large and mid-capitalization equity segment across developed and emerging markets worldwide. Use of the benchmark: - as investment universe. In general, the majority of the fund’s financial instruments are part of the benchmark. This said, investments outside this benchmark are admitted, - in the determination of risk levels/parameters. Deviation level of the portfolio composition from the benchmark: The fund being managed actively, its objective is not to invest in all constituents of the benchmark, nor to invest to the same extent in the constituents of the benchmark. Under normal market conditions, the tracking error of the fund will be important this is more than 4%. This measure is an estimation of the deviation of the fund’s performance compared to the performance of the benchmark. The more the tracking error is important, the more deviations compared to the benchmark are important. The effective tracking error depends notably on the market conditions (volatility and correlations between financial instruments) and can deviate from the expected tracking error. Redemption of shares: On request, every day, in Luxembourg. Allocation of income: Reinvestment. Recommendation: This fund may not be suitable for investors who plan to withdraw their capital within 6 years.