This year’s “Top 100 Funds – European Carbon Study” assesses the carbon footprints of the largest 100 Global and European mutual equity funds, with a sales registration for Austria, France, Germany, the Netherlands, Sweden or Switzerland. To independently compare and in order to efficiently score the mutual funds, this study has used the powerful “Carbon Footprint Analysis Tool” of yourSRI.com
Highlights of the study
For this study, the largest 100 funds licensed for distribution in Austria, France, Germany, the Netherlands, Sweden or Switzerland have been assessed for their carbon footprints. Most of the funds are registered in multiple countries and are therefore part of multiple top 100 lists. After reducing all doublecounting, the remaining number of funds assessed was 155, with a total of €364 billion of assets under management. Of the 155 funds, about two thirds have no geographical focus and are following a global strategy. The remaining funds focus on Europe.
The total annual GHG emission exposure of all screened funds amounts to 60.5 million tCO2e. This is more than the yearly emissions of a small country like Switzerland. Across all countries, the funds were associated on average with emissions of 172 tCO2e per €1 million invested, which is 2 to 3 times higher than a comparable low carbon index. In the French, German, Dutch and Swedish market, this average was lower. The span of the emission intensity per fund ranged from 2.3 to 827.3 tCO2e per €1 million invested. However, for approximately half of the funds, this range was narrower with values between 67.6 to 228.2 tCO2e per €1 million invested. Funds with a geographic focus on Europe were on average more carbon intense than the global ones.
Why should I measure my portfolio’s carbon footprint?
Recently, more and more investors, researchers, governments and international non-governmental organisations (NGOs) are realising that investments in companies that produce a high amount of CO2 or promote fossil energies are fraught with risk. The harder we strive to meet the 2-degree climate target, which was set by the international community as the critical climate policy target value based on the scenarios of the Intergovernmental Panel on Climate Change (IPCC), the greater the potential losses for investors.
Measuring the carbon footprint of your investments enables you to:
- meet national and international environmental reporting and disclosure requirements;
- measure and publicly disclose your Carbon footprint to your stakeholders;
- extend your mainstream financial reporting, monitoring, and controlling and improve your understanding of portfolio risks and opportunities related to climate change;
- compare your footprint to global benchmarks;
- identify priority areas and actions for reducing emissions;
- track progress in making those reductions.
“Understand the exposure to manage the risks”
Together with our partners we endeavour to promote and to raise awareness concerning carbon issues, the main aim being greater transparency, comparability, and measurability: the exact aim of this study.