Tag Archives: Trucost
Schrödinger’s Carbon: Intensity and Paris Alignment
In quantum mechanics, Schrödinger’s Cat refers to the paradoxical consequences of a thought experiment: can a cat be simultaneously dead and alive? A similarly counterintuitive phenomenon can be found in the context of climate-based analysis: whereby an index may boast a relatively low carbon intensity and yet, perhaps surprisingly, not be judged as aligned with…
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Resilience to Rising Carbon Prices: Do Eurozone S&P PACT Indices Stand the Test?
“Code red for humanity.” That’s how the imminent effects of climate change were described by the UN.1 Human-induced global warming stands at 1.1°C above pre-industrial levels, and will likely reach more than 2.7°C by 2100.2 If the world is to achieve the goals of the Paris Agreement and limit global warming to 1.5°C, decarbonization is…
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The Rising Importance of ESG Data
The demand from investors for environment, social, and governance (ESG) data and ESG products has never been stronger. This has triggered a growing industry of ESG data providers in the market. It is vital for S&P Dow Jones Indices (S&P DJI), when choosing ESG data providers who drive our ESG solutions to work with market-leading…
The World’s Largest Pension Fund Engages in Carbon Disclosure
This blog post was co-authored with Dr Richard Mattison, Chief Executive Officer, Trucost, part of S&P Global On Sept. 25, 2018, Japan’s Government Pension Investment Fund (GPIF)—the world’s largest pension fund—announced its selection of two new low-carbon indices, the S&P/JPX Carbon Efficient Index and the S&P Global Ex-Japan LargeMid Carbon Efficient Index, with an allocation…
Steps Toward a Low-Carbon Economy: From Footprints to Forward Estimates of Earnings at Risk
The landmark Paris Agreement to accelerate the transition to a low-carbon economy marked a sea change in the global fight against climate change. A swelling tide of carbon-limiting regulations has since emerged, shifting the narrative from a largely ethical debate to a material set of risks and opportunities for the financial markets, today. As the…
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ESG Strategies on the Rise
Environmental, social, and governance (ESG) risks have taken a strong hold in the developed investing space. Previously, the concept had resided in the domain of “do gooders” and “tree huggers” seeking to make a better world. So what has changed so much that it is now taking root in mainstream investing? By and large, ESG…
How an Industry Reduced Its Carbon Pricing Risk by 922%
Companies that act now to invest in low carbon technologies have the chance to maintain their license to grow and avoid carbon pricing costs that would significantly reduce profits. For example, in 2020, the technology sector’s investments in energy efficiency for their U.S. data centers could avoid over USD 6.9 billion in carbon costs and…
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Starting on the Right Foot: Preparing Accurate ESG Disclosures
As part of a series of articles on ESG disclosure, Trucost describes the importance of accurate ESG disclosure for reporters and readers. By the time this blog is up, some seasoned ESG reporters in Southeast Asia will have published their sustainability reports; another group will be finalizing their reports; while the rest will still be…
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Water Risk: Looking Back and Looking Ahead
Water scarcity risk has been in the spotlight recently with Cape Town’s efforts to avert “Day Zero” and the risk of taps running dry. Although this risk appears to be receding through radical conservation measures, including wholesale elimination of abstraction rights in some cases, it underlines the common global challenge of increasing fresh water scarcity….
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Carbon-Efficient Portfolio Construction Part 2: Sector-Relative Improves Efficiency
In a prior blog, we demonstrated that unconstrained carbon-efficient portfolios have significant unintended (and unfavorable) sector and risk factor tilts that can drag down performance. In this follow-up blog, we explore potential ways sector-relative, carbon-efficient portfolios can address the drawbacks of sector-unconstrained, carbon-efficient portfolios. To form sector-relative, carbon-efficient quintile portfolios, we ranked and grouped securities…
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