Our reports are written by external parties and analyse our equity portfolio in terms of the carbon emissions and other carbon related characteristics of the underlying portfolio companies. They compare this data to the performance of a relevant respectively chosen market benchmark. Metrics provide absolute and relative figures for portfolio carbon emissions and intensity measures: the total carbon emission answers the main question “What is my portfolio’s total carbon footprint?” as it measures the carbon footprint of a portfolio taking scope 1-2 emissions into account. The relative carbon footprint is a normalized measure of a portfolio’s contribution and is defined as the total carbon emissions of the portfolio per million EUR invested. It enables comparisons with a benchmark, between multiple portfolios, over time and regardless of portfolio size. Carbon intensity is expressed as the total carbon emissions per million EUR of revenue. It therefore measures the carbon efficiency of a portfolio per unit of output.
Together with PWC Germany we did a scenario anlysis:
• Two portfolios were analysed for transition risks in a 2°C global warming world (IEA), with
~1600 corporate titles (MSCI Portfolio) and ~400 titles VBV test portfolio. ~50% for MSCI and
~60% for VBV test of the overall titles in sectors that potentially are more exposed to climate related
risks and opportunities
• Risk position: Both portfolios would experience growth in a 2°C , the weighted MSCI
portfolio slightly higher (~1% p.a.)
• Portfolio management: However, an unweighted view shows material potential for
active portfolio management, leveraging the potential in transportation and agriculture, and
managing risks in the energy as well as materials and buildings sectors
• Company management: For active portfolio management, it is paramount to look into
sub-sectors and regional split
• Process integration and reporting: As the financial impacts result from fundamental
market, price, technology and competitive changes, the analysis can easily be integrated
into the existing company analysis and risk management, and provides the basis for the
TCFD integration roadmap and reporting as well as for strategy guidance