LONDON and NEW YORK, April 7, 2016 /PRNewswire/ -- S&P Dow Jones Indices (S&P DJI), one of the world's leading providers of financial market indices, today announced the S&P Index Carbon Emitter Scorecard, an innovative report which provides carbon production and efficiency metrics for major indices and styles across global markets.
The analysis is based on the S&P Global 1200 which captures approximately 70% of global equity market capitalization and is constructed of seven headline indices – the S&P 500®, S&P Europe 350, S&P TOPIX 150 (Japan), S&P/TSX 60 (Canada), S&P/ASX All Australian 50, S&P Asia 50 and S&P Latin America 40.
Highlights of the report include:
- Only around 15% of global emissions are directly produced by the world's blue-chip corporations, while the reduction required for global temperature to remain within 2°C from pre-industrial levels may be as much as 75%.
- If every constituent of the S&P 500® could reduce their direct emissions to zero, the impact would be roughly equivalent to removing all the emissions produced in France, Germany and UK combined.
- Investment Footprint, defined as total emissions per unit of market capitalization, is the lowest for the U.S. and Canada and the highest for Latin America, suggesting that the investments in the North American market carry a less material environmental impact.
- Revenue Footprint, defined as the ratio of total emissions to revenue generated by index constituents, is the lowest in Asia and the highest for Latin America, meaning that Asian markets may be less exposed to the risks of a global carbon tax regime than elsewhere in the world.
- On a sector basis the total carbon emissions are far from universal. Taking sector emissions into account, a more nuanced picture emerges, for example in the Financials sector, the U.S. market has a larger footprint than any other region.
- As well as geographic and sector differences, investment styles such as growth and value have a strong relationship to carbon footprint. If an investor wishes to position himself in companies traditionally associated with innovation and cutting edge development they are likely to favor growth companies, and lower their emissions footprint at the same time.
"Our S&P Index Carbon Emitter Scorecard helps to frame the importance of corporate and investor participation in the efforts to limit carbon emissions," comments Tim Edwards, Senior Director of Index Investment Strategy, S&P Dow Jones Indices. "By examining various measures of efficiency and discussing styles and sectors the report provides key considerations in building environmentally friendly portfolios including insight into the styles and sectors that are more likely to be powered by caffeine not fossil fuels."
S&P Dow Jones Indices develops and maintains a broad range of investable sustainability indices which are designed to measure the performance of companies that have demonstrated superiority in the areas of environmental, social or corporate governance responsibility. The index family also includes clean or alternative energy indices, carbon efficient indices and green investing themes such as water. S&P DJI sustainability indices are calculated using leading research from best-in-class providers – Trucost Plc and RobecoSAM. For more information on the S&P ESG Index Family please visit: www.spdji.com
Download the S&P Index Carbon Emitter Scorecard here.
About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 1,000,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.
S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"), a part of McGraw Hill Financial. Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.
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SOURCE S&P Dow Jones Indices