The Carbon Footprint of Capital Investments - adelphi

adelphi • The Carbon Footprint of Capital Investments
Executive Summary
Climate protection and financial services are
closely linked. Over 30 billion euros of additional
capital investment a year will be necessary in
future for Germany to achieve its climate protection
goals. That capital will largely be provided through
the finance industry.
The object of the study is to set out the correlation
between climate protection and capital investment.
It compares the greenhouse gas intensity
of conventional and climate-friendly capital investments.
At the same time, it provides an overview
of the situation in individual product categories.
The carbon footprint for capital investments
is an instrument which permits the financed
greenhouse gas emissions of capital investment
products to be depicted and compared. To that
end, this study for the first time investigates a
broad range of capital investment products. In the
study, carried out on behalf of Germany's Federal
Environment Ministry, adelphi differentiates
between various product categories and sets out
a comparison between conventional, sustainable
and climate-friendly capital investment products.
The results show:
• There is a significant link between private capital
investments and greenhouse gas emissions.
Every 10,000 euros invested currently finances
five tonnes of greenhouse gas emissions a year.
• Private investors can substantially reduce
their carbon footprint by choosing climatefriendly
and sustainable financial investments.
The average potential for reduction across the
investment portfolio is 42 %.
• Possibilities for reducing financed emissions
exist in all investment categories. In the individual
product categories savings of between
35 % and 87 % can be made.
• Within the product categories there is quite a
wide spread in terms of greenhouse gas intensity,
which indicates major potential for optimisation.
Even without formulating a consciously climatefriendly
investment strategy, conventional stock
funds vary by well over 100 % in their greenhouse
gas intensity.
• There is also a considerable spread among
sustainable and climate-friendly products. Some
product offerings still exhibit relatively high
intensity values.
• The number of climate-friendly investment
products on offer is currently still small. The
number of products is increasing steadily, however,
and customer interest is growing. The
climate-friendly investment products sector is
definitely a growth market.
• The carbon footprint is a very suitable instrument
for bringing greater transparency
to bear in judging the climate-friendliness of
capital investments. There are admittedly a
number of hurdles to be overcome before the
carbon footprint can deliver precise, globally
comparable and reliable data, but the instrument
in itself is without doubt capable of providing
valuable assistance to private investors and
financial services providers.