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19 Mar 2024

SNB reveals carbon footprint of its portfolio for first time

The Swiss National Bank disclosed the carbon footprint of its investment portfolio for the first time, responding to critics who have demanded it take a more active stance on climate change. The SNB said it’s “not authorized to pursue structural policies” and pursuing such actions could make it more difficult for its to fulfill its primary mandate of inflation control. The SNB’s environmental rules only ban coal miners. That means its holdings include firms involved in fracking, and the oil and gas industries.
Source: Bloomberg

29 Nov 2023

Dozen of countries are now seeing a steady decline in C02 emissions alongside economic growth

Another tangible proof that being green (or at least greener) does not mean de-growth Source: FT

14 Aug 2023

Amazon is the largest corporate purchaser of clean energy in 2022 at 12,415MW

They are closely followed by other large tech companies such as Meta, Google, and Microsoft. Source: Genuine Impact

11 Aug 2023

"Companies with good ESG scores pollute as much as low-rated rivals". The finding holds true even when researchers looked only at the environmental part of the metric.

Companies rated highly on widely accepted environmental, social and governance metrics pollute just as much as lowly rated companies, research has found. This perverse lack of correlation holds even if companies’ carbon intensity — their carbon emissions per unit of revenue or market capitalisation — is compared purely to their environmental rating, according to Scientific Beta, an index provider and consultancy. “ESG ratings have little to no relation to carbon intensity, even when considering only the environmental pillar of these ratings,” said Felix Goltz, research director at Scientific Beta. “It doesn’t seem that people have actually looked at [the correlations]. They are surprisingly low.” “The carbon intensity reduction of green [ie low carbon intensity] portfolios can be effectively cancelled out by adding ESG objectives.” The findings come amid strong demand for ESG investment, with “sustainable” funds globally attracting net inflows of $49bn in the first half of this year, according to Morningstar, while the rest of the fund industry saw outflows of $9bn. Goltz and his colleagues looked at 25 different ESG scores from three major providers: Moody’s, MSCI and Refinitiv. They found that 92 per cent of the reduction in carbon intensity that investors gain by solely weighting stocks for their carbon intensity is lost when ESG scores are added as a partial weight determinant. Even just using environmental scores, rather than the whole panoply of ESG, “leads to a substantial deterioration in green performance”, they found. Worse still, mixing social or governance ratings with carbon intensity typically creates portfolios than are less green than the comparable market capitalisation-weighted index, the researchers noted. “On average, social and governance scores more than completely reversed the carbon reduction objective,” Goltz said. He offered a simple explanation for this, namely that “the correlation between ESG scores and carbon intensity is close to zero [at 4 per cent]. The two objectives are unrelated and are therefore hard for investors to simultaneously achieve.” “It can very well be that a high-emitting firm is very good at governance or employee satisfaction. There is no strong relationship between employee satisfaction or any of these things and carbon intensity,” Goltz argued. Source: FT


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