Is your investment green enough?
A survey by consultancy firm Mercer, carbon data provider Trucost and environmental organisation WWF finds that greenhouse gas emissions from 118 UK-based investment management firms, with 206 billion pounds in assets under management, range from 209 to 1,487 tonnes per million pounds invested.
The report showed that the funds hold investment to 1.4 percent of the market capitalisation of 2,380 companies, which accounts for approximately 134 million tonnes of carbon emissions. These equate to 22 percent of UK greenhouse gas emissions.
Nine of the 10 main contributors to the overall carbon footprint of the portfolios are in the utilities and oil and gas sectors. The research includes in-depth analysis of the increasingly negative effects that carbon costs could have on carbon-intensive utilities and oil and gas companies.
“Asset managers could dramatically reduce the carbon footprints of their funds through stock selection without the need to alter sector weightings or their overall investment strategy,” the report says.
“Asset owners could take (actions) such as incorporating climate change criteria into their investment policies, encouraging fund managers to actively manage the carbon risk in their investment portfolios, looking for new investment opportunities and supporting mandatory emission disclosure initiatives.”