The carbon footprint of the equity portfolio of Etica Sgr funds
The carbon footprint is a calculation of the climate change gases emitted by a product, organization or individual.
- Etica Sgr made a commitment to measuring and reporting the emissions of its equity portfolio through a calculation of its carbon footprint with the signing of the Montréal Carbon Pledge beginning in 2015. Etica Sgr’s carbon footprint is an accurate measure of sustainability that goes beyond financial and economic performance focusing attention on the environmental impact of its investments.
Average emissions per million euros of revenues of the firms in the equity portfolio of Etica Sgr funds:
290 tons CO2e* ⮕ -70% compared with the benchmark
65% Companies in the portfolio of Etica Sgr funds that have undertaken to develop products and services to reduce GHG emissions.
85% Companies in the portfolio of Etica Sgr funds that have set themselves emissions reduction targets.
84% Companies in the portfolio of Etica Sgr funds that have reported a reduction in GHG emissions. Company initiatives to reduce CO2 emissions have
brought about savings of 16,841 tons CO2e. This is equivalent to the quantity of CO2
absorbed each year by a forest of 80 sq. km.
How much CO2 is emitted to produce these products?
*CO2 e (CO2 equivalents) is the standard unit of measurement for the carbon footprint of any greenhouse gas (including methane, ozone and nitrous oxides) in
terms of the quantity of CO2 necessary to produce the same climate change effect. This allows us to compare different gases by considering their contribution
to the greenhouse effect. The CO2e calculation depends on the conversion factors used.
CARBON FOOTPRINT CALCULATION DATA
In 2018 Etica Sgr enlarged the analysis perimeter for the Etica Azionario portfolio to the entire equity portfolio of Etica Sgr’s funds and adopted the MSCI World index as benchmark for the equity component.
The companies considered in the analysis of the equity portfolio of Etica Sgr’s funds and the benchmark refer to the composition of the funds at 31/12/2017.
The analysis is based on CDP (ex Carbon Disclosure Project) Scope 1 and Scope 2 emissions data for accounting year 2017 and revenue data on 31/12/2017 reported by Bloomberg.
According to the international GHG Protocol classification, Scope 1 emissions are the direct greenhouse gas emissions by the company or its subsidiaries (fossil fuels used in the production process, vehicle emissions of its corporate fleet, etc.). Scope 2 emissions are the indirect greenhouse gas emissions, not generated by the company, but a direct consequence of its business (emissions from the generation of electricity, heating / cooling, etc.).
RECOMMENDATIONS OF THE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
The analysis reported here complies with the June 2017 recommendations of the TCFD, a body set up by the Financial Stability Board (FSB) to furnish guidelines on the disclosure of risks associated with climate change. In particular, we focused on the portfolio-weighted average emissions per million euros of revenues.
This metric allows us to measure the effect of the decision to select only the most efficient companies in terms of climate impact for admission to the portfolio.
CO2 e emissions per 100 euros invested is the ratio of total emissions of firms in the portfolio – calculated as the total CO2 emissions by companies in the portfolio weighted by the percentage of shares held – to the net worth of the equity portfolio of Etica Sgr’s funds.