Investment fund assets won’t miss climate targets, study finds

July 21 (Reuters) – Global investment funds and major stock indices have broad exposure to companies that are expected to miss a target critical to efforts to limit climate change, new research from the data firm showed on Thursday. sustainability ESG Book.

More than 70% of assets on average across some 35,000 investment funds will contribute to global warming above 1.5 degrees Celsius (2.7 Fahrenheit) by 2050 without significant reductions in emissions, ESG Book said.

While some of the world’s biggest investors have pledged to cut emissions in line with the 1.5 degree target, which scientists say is needed to avoid the worst effects of climate change, they have faced challenges to achieve reductions or even measure portfolio emissions. Read more

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“Markets still lack the precise information needed to allocate capital more efficiently to higher-impact, sustainable assets,” said Daniel Klier, Managing Director of ESG Book.

ESG Book analyzed $40 trillion of equity and fixed income funds and assigned temperature scores to their assets based in part on their emissions per million dollars of revenue or intensity ratios. emissions.

The researcher also found that none of the world’s major stock indices are on track to stay below 1.5 degrees.

The Dow Jones Industrial Average (.DJI) had the lowest emissions intensity of the standard market indices thanks to constituent companies in the financial, retail and technology services sectors, according to ESG Book.

The Australian ASX 200 (.AXJO) emissions intensity ratio was more than eight times higher, driven by utilities and energy mineral companies.

ESG Book said the emissions profiles could be even higher in reality because the company does not account for Scope 3 emissions, which refer to emissions generated by suppliers and customers while along a company’s value chain, in its emissions intensity ratios.

These emissions often make up the majority of a company’s overall emissions, according to the US Environmental Protection Agency.

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Reporting by Cole Horton in New York; Editing by Cynthia Osterman

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