Carbon Scorecard for Global Equity Portfolios

Key Insights

  • UN PRI and UN SDGs provide strong encouragement and a defined framework for investors to assess impacts of their investment decisions including carbon emissions and its impact on climate.
  • Australia has the highest per capita greenhouse gas emissions in the OECD (26 tCO2e/person/year). The country has set its 2030 target to reduce its emissions by 26%-28% from 2005 levels.
  • As an effort to achieve these targets, investors are actively seeking and demanding more advanced analytics on the impact of their investment decisions on carbon emissions and carbon risks.
  • We demonstrate, using a data-driven approach, how advanced analytics can be used to assess carbon risks in portfolios, assess key drivers of emissions from security, sector, country and decision perspectives
  • These carbon and sustainability analytics can be integrated with financial and investment matrix to allow super fund trustees and investors to measure, monitor, benchmark their portfolio’s footprint to carbon.
  • Data is now available to provide in-depth analysis across both equity and bond portfolios.

 

UN PRI Initiative acts as a catalyst for global investors

In 2006, the United Nations-supported Principles of Responsible Investment (UN PRI), an investor-led initiative, was launched to foster the development of a sustainable global financial system, which “will reward long-term, responsible investment and benefit the environment and society as a whole.” Since then, there have been 1961 signatories with a total asset under management of US$ 81.7 trillion as at April 2018. The preamble to UN PRI has stated: “We recognise that applying these Principles may better align investors with broader objectives of society”.

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