Carbon Intensity of Listed Equities Static in 2022
The carbon intensity of broad equity portfolios this year is likely to remain on par with 2020, according to a new analysis published by index and data provider FTSE Russell in association with the UN Net Zero Asset Owners Alliance. Using carbon exposure data from the 4,000 constituents of the FTSE All-World Index, the study said the weighted average carbon intensity (WACI) for the index in 2022 “would be relatively similar to 2020, increasing by less than one percent”. Although inflationary pressures would decrease carbon intensity through their impact on company revenues, this would be counteracted by an increase in the index weight of high-carbon industries such as energy and basic materials. The WACI of global equity portfolios decreased at a rate of 2% per annum from 2014-2020. FTSE Russell said the report aimed to help investors think about how they should approach measuring and tracking the decarbonisation of their portfolios. A separate new report from FTSE Russell explores approaches for applying 1.5°C scenario-aligned investment trajectories to listed equities.
We’ve partnered with the #NetZero Asset Owner Alliance to share our findings on #emissions reduction from 2014-2020. Download our research paper as #ClimateWeekNY continues: https://t.co/yoOBvssumu #NZAOA pic.twitter.com/WiWEmFqDZ2
— FTSE Russell, An LSEG Business (@FTSERussell) September 22, 2022