Why would I want to measure my portfolio’s carbon footprint?

Measuring the carbon footprint of a portfolio means you can:

  • compare it to global benchmarks
  • identify priority areas and actions for reducing emissions
  • track progress in making those reductions

Investors who have already measured the carbon footprint of portfolios say that doing so can:

  • improve their own understanding of the portfolio risks and opportunities that climate change presents
  • give them answers to stakeholder questions on climate change
  • allow them to publicly demonstrate commitment to tackling climate change

There’s also ever-growing pressure – from governments, civil society and from the investment community – for companies and the investors that hold stakes in them to measure and reduce their carbon footprint. Specific initiatives include:

Investor initiatives

Government initiatives

calling for “stable, reliable and economically meaningful carbon pricing that helps redirect investment commensurate with the scale of the climate change challenge”

aiming to attract commitments to measure and disclose the carbon footprint of portfolios totalling US$3 trillion by the United Nations Climate Change Conference in December 2015

aiming to create a critical mass of institutional investors decarbonising their portfolios, to incentivise companies towards carbon efficiency

  • Internal reviews

e.g. the Norwegian Government Pension’s Fund Fossil-Fuel Investments Review

including new targets for carbon emissions reductions by the United States (26%-28% below 2005 levels by 2025) and a first-ever commitment by China to halt its emissions growth (by 2030, and with non-fossil fuel sources to be 20% of the mix)

calling for fossil fuels to be phased out by 2100

in Paris in November/December 2015

  • Almost 500 climate laws have been passed in at least 66 countries, with increasing pace in emerging markets

e.g. in the UK the 2008 Climate Change Act commits to legally binding carbon budgets and to reducing emissions by at least 80% from 1990 levels by 2050