Key Findings

• 
  
  In absolute terms, the carbon associated with the stocks in the fund fell by 1%. The fund’s relative carbon intensity – emissions per million pounds of investment – fell faster, declining by 7% to 554 t CO2e/£ million.
  
  


• 
  
  Within the fund, some companies cut their emissions, such as BT and Pennon, while others increased their carbon output, such as Centrica and Scottish & Southern Energy.
  
  


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  The fund’s focus on high-yielding stocks gives it a high weighting in utilities, notably Scottish Power, Centrica and Scottish & Southern Energy, which account for over 40% of the fund’s carbon footprint.
  
  


• 
  
  Turning to the wider stock market as measured by the FTSE All Share, absolute emissions rose by 5%, but its relative carbon intensity fell by 4%. This was largely due to the departure from the index of carbon intensive companies – such as BPB, Exel and P&O – and increased valuations for the oil and gas sector. By and large, new entrants to the index were 15% less intensive than those that exited the All Share.
  
  


• 
  
  Portfolio companies had considerably higher levels of carbon disclosure than the index, with 52% reporting their emissions, compared with less than 20% for the FTSE All Share.
  
  

Why did Henderson Global Investors commission the research?

Just as companies need to improve the quality and quantity of their reporting on climate change, it is also important for investors to become transparent about their own policies and practices. To this end, Henderson published the first carbon audit of an investment portfolio in June 2005, commissioning Trucost to compare the emissions associated with the Global Care Income fund with its benchmark, the FTSE All Share. The results showed that the fund was 32% less carbon intensive than the overall market, testimony to the environmental criteria that guide its investments.

Henderson then wished to repeat the exercise in 2006 to understand how the fund’s performance had evolved. Trucost calculated the carbon emissions (CO2e) associated with the fund’s holdings and the wider index on 31 December 2005, making estimates where data was not reported. These results were then normalised using the value of the fund and the index to produce a measure of carbon intensity.

Further Trucost research commissioned by Henderson

How Green is My Portfolio? a carbon audit of the Henderson Global Care Income Fund 

The Carbon 100: quantifying the carbon emissions, intensities and exposures of the FTSE 100 

The Future is Low Carbon: the 2006 carbon audit of the Henderson Industries of the Future Fund 

Carbon audit of Henderson Global Care UK Income Fund

Carbon audit of Henderson Industries of the Future Fund

Report image: Carbon audit: Henderson Global Care Income

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