The Carbon Footprint of Capital Investments - adelphi

018 adelphi • The Carbon Footprint of Capital Investments adelphi • The Carbon Footprint of Capital Investments
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Figure 8: Greenhouse gas intensity of average stock funds with variations
Figure 9: Comparison of pension funds
2,000
400
gGHG per euro
1,800
350
300
369
–43 %
1,600
250
1,400
200
210
1,200
1,000
–46 % –30 %
150
100
50
800
0
Pension funds
Sustainability pension funds
600
Source: Own data
400
200
0
Source: Own data
Conventional funds Sustainability funds Climate funds
1,111 gGHG per euro. This roughly matches the
result for the conventional index.
Some sustainability funds have much lower
greenhouse gas intensities than the supposedly
low greenhouse gas intensity climate funds.
Here, too, the variance in results is considerable.
The figures are between 1,265 gGHG per euro –
comparable to that for a conventional fund – and
very low values around 308 gGHG per euro. The
20 largest sustainability funds overall have an
average greenhouse gas intensity of 605 gGHG
per euro. This figure, too, is very close to the
average for sustainability indices of 632 gGHG per
euro.
The average greenhouse gas intensity of the
climate fund's investment universe is 776 gGHG
per euro. This is above the intensity of the sustainability
funds. Again here, the variance of the
results is very high.
The results show that many climate funds
currently incorporate the criterion of greenhouse
gas intensity only to a limited extent. Despite
comparable investment strategies, some of the
analysed climate funds include highly greenhouse
gas-intensive stocks which, though making a
contribution to climate protection in some of
their business units, are generally founded on a
greenhouse gas-intensive business model. No
fund attained the low greenhouse gas intensity of
the renewable energy index in the calculations.
The conventional funds generally exhibit a higher
emissions intensity than climate or sustainability
funds. The wide variance shows, however, that
there is certainly a broad framework for optimising
greenhouse gas intensity here too. Some
individual funds attained the level of sustainability
and climate funds without having stated a
conscious policy of investing in low greenhouse
gas emission stocks.
5.3
Bonds and pension funds
The calculation of pension funds in respect of
enterprises and countries follows the same
logic as already applied to savings deposits.
Private investors acquire shares in the equity of
business enterprises and other institutions by
purchasing bonds and pension funds. With regard
to bonds and pension funds, the study only takes
into account sustainability products. No capital
investment product investing in fixed-interest
securities oriented explicitly to climate protection
could be found.
To illustrate calculation of the average greenhouse
gas intensities of investment products
in fixed-interest securities, one conventional
and one sustainable pension fund respectively
were analysed, both funds being among the
leading funds on the German market and as
such permitting maximum comparability. Since
companies frequently issue bonds through banks,
a bond cannot always be allocated to a single
company in the pension funds' annual reports.
Consequently, funds investing most of their assets
in corporate bonds could not be analysed. But
government bonds play a much greater role than
corporate bonds in the eurozone anyway. In view of
that, two funds primarily investing in government
bonds were compared here. As the emissions
intensity of the pension funds is to a great extent
dependent on the scale of investment in corporate
or government bonds, this analysis compared two
funds, with a very similar mix of the two categories,
which invest primarily in government bonds
and which dominate the market in continental
Europe.
The results for the analysed pension funds show
a widely differing greenhouse gas intensity. The
sustainability pension fund exhibits a much lower
greenhouse gas intensity – 210 gGHG per euro –
than its conventional counterpart, at 369 gGHG per
euro. This evidently results from the interposed
sustainability analysis of the issuing governments.
The sustainability fund invests in countries with
much lower greenhouse gas intensities than the
conventional pension fund.