Carbon-Adjusted Return: A New Metric for Evaluating the Carbon Intensity of Fund Performance

We believe that for those allocating capital to Article 9 funds – vehicles explicitly targeting sustainable investments under the Sustainable Finance Disclosure Regulation (SFDR) – the importance of measuring their carbon footprint is becoming a key element. One metric we would encourage investors to consider is the Carbon Intensity Adjusted Return, which provides valuable information on what carbon intensity is necessary for a fund to generate its return.

High carbon intensity within a portfolio can indicate exposure to companies facing potentially declining future revenues, heightened regulatory risks, rising operational costs, and impaired asset values in a carbon-constrained world. We began exploring this risk perspective in our ESG2Risk: A Deep Learning Framework from ESG News to Stock Volatility Prediction (2020) and AI for ESG Integration: Training Machines to Predict Sustainable Alpha (2023) papers.

Many investors in Article 9 funds have net-zero targets and aim to combine financial returns with a positive environmental impact. Therefore, monitoring fund carbon emissions through the lens of carbon intensity and historic returns offers a complementary assessment of how a fund manager generates returns.

This analysis is interesting as a significant divergence exists across the landscape of Article 9 Global Equity funds regarding the carbon intensity asset managers are willing to accept to achieve their performance. This stands in sharp contrast to volatility, where fund managers show much greater alignment on what constitutes an acceptable balance between risk and return.

Source: Quantalys, Climate and Sustainability-focused Global Equity peer group [99 names]. Statistics in EUR, data as of 18^th July 2025.

RAM Global Equity Low Carbon Fund

The RAM Global Equity Low Carbon Fund celebrated its fifth anniversary in July, marking five years of strong performance delivered with a significantly lower level of Scope 1+2+3 emissions than the vast majority of its peers. This achievement is particularly notable given that low emissions in many Article 9 strategies are often associated with higher allocations to traditionally low-emitting sectors, whereas the RAM Global Equity Low Carbon Fund maintains a high level of sector diversification.

Source: Quantalys, Climate and Sustainability-focused Global Equity peer group [99 names]. The size of chart bubbles is in proportion to fund size. Performance Statistics in EUR, data as of 18^th July 2025.

This consistent performance, combined with its low carbon footprint, has been achieved through a deliberate and robust investment philosophy:

Consult the factsheet for more information about the fund

Disclaimer
Important Information:
The fund is a Sub-Fund of a Luxembourg SICAV with registered office: 14, Boulevard Royal L-2449 Luxembourg, approved by the CSSF and constituting a UCITS (Directive 2009/65/EC). This marketing document is only provided for information purposes to professional clients, and it does not constitute an offer, investment advice or a solicitation to subscribe shares in any jurisdiction where such an offer or solicitation would not be authorised or would be unlawful. In particular, the Fund is not offered for sale in the United States or its territories and possessions, nor to any US Person (citizens or residents of the United States of America). The information and opinions contained in this document were obtained from reliable sources at the time of publication. Note to investors domiciled in Singapore: shares of the Sub-Fund offered in Singapore are restricted schemes under the Sixth Schedule to the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations of Singapore. This document is confidential and is intended only for the use of the person to whom it was delivered; it may not be reproduced or distributed. There is no guarantee that the holdings shown will be held in the future. The investment described concerns the acquisition of shares in the Sub-Fund and not in a specific underlying asset. Past performance is not a guide to current or future results. There is no guarantee to get back the full amount invested. The performance data do not take into account fees and expenses charged on subscription and redemption of shares nor any taxes that may be levied. As a subscription fee calculation example, if an investor invests EUR 1000 in a fund with a subscription fee of 5%, the investor will pay EUR 47.62 on the investment amount to the intermediary, resulting in a subscribed amount of EUR 952.38 in fund shares. In addition, potential account-keeping costs (charged by the investor’s custodian) may reduce the performance. Some shares in the Sub-Fund may apply a performance fee. Please refer to the section “Charges” and to the “Glossary” in this document for further details. Leverage intensifies the risk of potential increased losses or returns. Changes in exchange rates may cause the NAV per share in the investor’s base currency to fluctuate. Particular attention is paid to the contents of this document, but no guarantee, warranty or representation, express or implied, is given as to its accuracy, correctness or completeness. Prior to any transaction, clients should check whether it is suited to their personal situation and analyze the specific risks incurred, especially financial, legal, and tax risks, and consult professional advisers if necessary. Please refer to the Key Investor Document and the prospectus, with special attention to the risk warnings, before investing. For further information on ESG, please refer to https://www.ramai.com/en/regulatory-information and the relevant Sub-Fund webpage under “Sustainability related disclosures”. The prospectus, constitutive documents, and financial reports are available in English and French, while KIDs are available in the relevant local languages. These documents can be obtained free of charge from the SICAVs’ and Management Company’s head office and from www.ram-ai.com, its representative and distributor in Switzerland, RAM Active Investments S.A. For local information (similarly to what is provided for Austrian investors), documents are available on www.ram-ai.com or from Mediobanca Management Company S.A., 2 boulevard de la foire 1528, GrandDuché de Luxembourg. A summary of Investors’ rights is available on: https://www.mediobancamanagementcompany.com/en. Issued in Switzerland by RAM Active Investments S.A., which is authorized and regulated in Switzerland by the Swiss Financial Market Supervisory Authority (FINMA). Issued in the European Union and the EEA by the authorized and regulated Management Company, Mediobanca Management Company S.A., 2 boulevard de la foire 1528, Grand-Duché de Luxembourg. The source of the above-mentioned information (except if stated otherwise) is RAM Active Investments, and the date of reference is the date of this document.