August 29, 2013
Alliance Trust Investments Measures Carbon Footprints of its Funds
by Robert Kropp
The UK investment firm’s analysis reveals that three of its sustainable equity funds emit less than
half the carbon dioxide of their benchmarks.
The UK-based investment firm Alliance Trust Investments has measured the carbon intensity of three of its
Sustainable Future equity funds, and found that on average the three funds emitted less than half
the carbon dioxide (CO2) emitted by their benchmarks.
Allocating capital in favor of
companies that emit less CO2 “can be seen as a proxy for better run, efficient companies that can
gain a broad competitive advantage in a resource constrained, rising energy price environment or in
the event of increased regulation on big CO2 emitters,” Alliance stated. “The portfolio would have
to pass on less of their CO2 related costs to their customers than the market to retain the same
level of profitability and are therefore less at risk from tightening regulation to curb greenhouse
“If you can generate similar or better than the market investment returns
by investing in companies that emit significantly less CO2 than average, then this way of investing
can be seen as less damaging to our collective environment, less at risk from regulation to curb
CO2 emissions and a more a sensible and proactive way of investing,” Mike Appleby of Alliance
Speaking to Green Century Capital Management began
using environmental analyses provided by Trucost to measure the carbon footprint of its Green Century
Trucost's analysis of the Green Century Balanced Fund found that companies
in the Fund's current portfolio emit 126 tons of carbon dioxide equivalent (CO2-e) emissions for
every $1 million of revenue generated, which is 66% less than the benchmark of companies in the S&P
500. Three companies in the portfolio—Air Products and Chemicals, General Mills, and 3M—were found
to account for 28% of the portfolio's carbon footprint, but only 5% of its value.
analysis, the Green Century Balanced Fund became the first US-based mutual fund to disclose its own
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