Etude

Investor guide to carbon footprinting

Climate change and COP21 will have implications for investors. There is strong momentum around carbon footprint as well as growing regulatory pressure. However, it is sometimes difficult to find the right direction in the landscape of carbon metrics.

Whether you are interested in impact investing, SRI, ESG, responsible finance or climate change risk, this guide prepared by Kepler Chevreux in partnership with Deloitte, IIGCC and 2°Investing Initiative, answers the main questions on the topic of carbon and climate change metrics.

Among the key answers:
  • Portfolio carbon footprinting is usually the entry point of most investors. It may be adequate to understand and communicate the contribution of investments to climate change.
  • Carbon footprint need other metrics to understand the positive contribution of certain investments to climate change and the risk associated with certain investment in the medium and long run.
  • Alternative and complementary metrics such as ‘green-brown’ share and ‘avoided emissions’, have pros and cons and ultimately it depends on the aim of the analysis.
  • Metrics deliver their full meaning when compared to a relevant benchmark.