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The Future is Low Carbon: the 2006 carbon audit of the Henderson Industries of the Future Fund
01 June 2006
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Key Findings
Overall, the Industries of the Future fund is 43% less carbon intensive than the MSCI World Index. Specifically:
- The fund generated just 393 tonnes of carbon per million pounds of investment compared with the index which generated 693 tonnes.
- The most carbon exposed stock in the MSCI index had an intensity of 24,292 tCO2e/£mn compared with the most intensive stock in the fund with an intensity of 3,919 tCO2e/£mn.
- The fund did not hold any of the 100 top carbon intensive stocks in the index, with Veolia ranking 118th.
- The fund’s zero holdings in the oil and gas sector, and absence of fossil fuel power generation made the largest positive contribution. Conversely, the fund’s extensive holdings in the industrial sector dampened this carbon
Extract
This report summarises the analysis of the carbon emissions of the Industries of the Future fund managed by Henderson Global Investors. The greenhouse gas emissions for each holding in the portfolio have been calculated and converted to tonnes of carbon dioxide equivalent (CO2e). The direct emissions from each company are taken into account as well as the indirect emissions from the first tier of suppliers (e.g. from purchased electricity). Each holding's contribution to the emissions profile of the portfolio is then calculated on an equity ownership basis. The 'Carbon Footprint' of the fund is the sum of all of these contributions. The 'Carbon Intensity' of the portfolio is the Carbon Footprint normalised by its value. This analysis has also been carried out on the portfolio's benchmark, the MSCI World, for the purposes of comparison.
Why did Henderson Global Investors commission the research?
The positive investment strategy adopted by the Industries of the Future fund should bring clear climate change benefits. Building on the carbon audit of its Global Care Income fund undertaken in 2005, Henderson commissioned Trucost to evaluate the scale of these benefits. Taking fund holdings at the end of 2005, Trucost calculated the direct and indirect emissions in terms of carbon dioxide equivalent (CO2e), making estimates where data was not reported. These results were then normalised using the value of the fund to produce a measure of carbon intensity, which was compared with the fund’s benchmark, the MSCI World Index.
Report image: Carbon footprint and carbon intensity analysis
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