Decarbonization 3.0 Strategy Overview

This document is a guide that outlines the Decarbonization 3.0 strategy developed by Russell Investments. It details the evolution of the decarbonization framework from its inception in 2015 through its iterations in 2018 and 2025. The guide explains how Decarbonization 3.0 aims to enhance portfolio alignment with the low carbon transition by replacing the renewable energy exposure with a broader climate solutions revenue metric. This change is intended to capture a wider range of companies contributing to decarbonization across various sectors. The document describes the systematic portfolio construction process that aims to reduce emissions exposure while maintaining alignment with climate solutions. It also discusses the challenges of traditional decarbonization strategies, particularly the risk of underweighting companies that facilitate the low carbon transition due to their higher carbon footprints. The guide emphasizes the importance of integrating climate solutions into investment strategies to achieve better sustainability outcomes.