If every constituent of the S&P 500 reduced their direct carbon emissions to zero, the impact would be roughly equivalent to removing all emissions generated by France, Germany and the UK combined, a report has found.
The findings are published in the Carbon Emitter Scorecard, published by financial index provider S&P Dow Jones Indices. The report provides carbon production and efficiency metrics for major indices and styles across global markets.
Total emissions per unit of market capitalisation is the lowest for the US and Canada, and the highest for Latin America, suggesting investments in the North American market carry a less harmful environmental impact.
The ratio of total emissions to revenue generated by index constituents is lowest in Asia and highest in Latin America, meaning Asian markets may be less exposed to the risks of a global carbon tax regime than elsewhere in the world.
The report also found that investment styles such as growth and value have a strong inverse relationship with carbon footprint size. Investment in tech firms is likely to reduce a portfolio’s carbon emissions, for instance.
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