• New UCITS fund applies quantitative resource efficiency methods to economies driving most global emissions and energy demand growth.
• Three-year data programme standardises carbon, water, and waste metrics across emerging markets, addressing long-standing reliability concerns.
• Seeded with USD 80 million from the IMAS Foundation, the strategy targets low tracking error, measurable environmental reductions, and improved risk-adjusted returns.

Osmosis Investment Management has launched the Osmosis Emerging Markets Core Equity Transition Fund, a UCITS vehicle aimed at bringing its resource efficiency model into regions that shape the global emissions trajectory. The fund begins trading on December 10 with USD 80 million in seed capital provided by the IMAS Foundation, entering a market environment where equity launches have slowed and sustainable strategies have become increasingly selective.

The firm positions the strategy as a timely intervention. Emerging markets remain structurally underrepresented in sustainable equity allocations despite their importance for climate outcomes and long-term economic demand. Many global allocators cite constrained data quality and a shortage of credible quantitative frameworks as persistent barriers.

Three Years of Research Rebuilds the EM Sustainability Dataset

The fund is the culmination of a multi-year effort to collect and standardise environmental disclosures across the emerging markets universe. Osmosis assigned a dedicated analyst group to assemble and clean reported carbon, water, and waste data across major sectors. The team sought to determine whether publicly available information was now sufficient to support systematic portfolio design.

Their conclusion reshapes the conventional view of EM sustainability data. According to the firm, the dataset now possesses the depth and consistency needed to support robust modelling frameworks. The work offers investors a more stable foundation for environmental assessment at a time when policy, supply chain transparency, and climate adaptation are accelerating across developing economies.

Extending a Proven Model Into Economies Shaping Global Emissions

The strategy replicates the resource efficiency methodology that underpins Osmosis’ USD 15 billion developed markets core equity approach. The model identifies companies that use less carbon, water, and waste per unit of economic output relative to sector peers, with the hypothesis that such firms are typically better governed and generate more stable profits over time.

Osmosis plans to allocate capital toward these companies while maintaining diversified exposure across the benchmark. The firm expects the quantitative model to achieve a reduction of approximately 60 percent in ownership of carbon, water, and waste, while preserving a low tracking error against the MSCI Emerging Markets index. This design aims to meet rising investor demand for transition aligned strategies that do not distort portfolio construction or rely on broad exclusions.

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Ben Dear, CEO and Founder of Osmosis, said:
“Emerging markets sit at the centre of the climate challenge, yet investors are too often reliant on limited third party data and simplistic negative screens that lead to sub optimal portfolios and, in some cases, entirely inaccurate environmental profiles. By applying our Resource Efficiency process here, we can offer investors disciplined portfolio construction with environmental insight that is grounded in genuine data and genuine research.”

A More Nuanced Alternative to Low Carbon Screens

Investors searching for sustainable core exposure to emerging markets have historically faced a trade off between environmental ambition and index-aware risk management. Many low carbon products limit headline emissions but lack the tools to support transition trajectories or detect operational inefficiencies within sectors. Osmosis is pitching its approach as a next generation alternative that integrates environmental metrics directly into financial modelling rather than treating them as exclusions.

Jamie Padkin, Head of Emerging Markets Research, said:
“Data is the decisive factor in quantitative emerging markets investing. Our mandate was to replicate our developed markets methodology while adapting to the complexity of these economies. I am delighted that this research effort now results in a fully investable strategy that challenges outdated assumptions about sustainability data in emerging markets.”

Why This Matters for Global Allocators

Emerging and developing economies produce more than two thirds of global emissions and generate most future energy demand. They are also where climate adaptation, industrial reform, and supply chain resilience will shape the next decade of investment flows. For institutional investors seeking diversified exposure with measurable environmental impact, a data grounded strategy offers a way to participate in growth markets without abandoning climate alignment.

The fund’s launch situates Osmosis within a broader shift across asset management. As scrutiny intensifies on transition credibility and real world outcomes, quantitative models that can detect efficiency, governance quality, and climate resilience inside high emitting economies are moving from niche tools to strategic requirements.

For global executives, allocators, and policymakers, the launch signals the growing expectation that capital will be steered using more granular environmental insight, especially in regions where emissions trajectories will determine global climate outcomes. The question now is how quickly the rest of the industry can close the data gap that Osmosis has spent three years attempting to solve.

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