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Carbon risks and opportunities in the S&P 500

02 June 2009

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Key findings include:

  • Total emissions, including direct emissions from operations and indirect emissions from suppliers, amount to 4,307 Mt of CO2-e for companies in the S&P 500 Index.
  • 34 companies in the Utilities sector account for the highest level of total emissions, followed by the Oil & Gas, Industrial Goods & Services, Food & Beverage and Basic Resources sectors.
  • Direct emissions: More than half of the total greenhouse gases emitted by companies in the S&P 500 result from fuel use and industrial processes at the 497 companies analyzed, known as direct "Scope 1" emissions under the Greenhouse Gas Protocol. The 2,173 million metric tons of carbon dioxide-equivalent (Mt CO2-e) emissions from the global operations of S&P 500 companies each year equate to over 30% of all US greenhouse gas emissions in 2007. This is more than total emissions from all road and air transport in the US during 2007.
  • Utilities, Oil & Gas, and Basic Resources companies account for 85% of direct emissions from S&P 500 companies. Companies in these sectors covered by cap-and-trade programs would incur carbon costs through their direct emissions.
  • Supply chain emissions: For over 80% of the companies analyzed, the majority of greenhouse gas emissions are from purchased electricity and other direct suppliers, rather than from operations that they control or own. They could therefore be most exposed to carbon costs passed on by suppliers in higher prices.
  • Emissions from electricity purchased by S&P 500 companies amount to almost 319 million tons of carbon dioxide-equivalent (Mt CO2-e). All other emissions associated with suppliers total almost 1,816 Mt CO2-e.


Investor Responsibility Research Center Institute for Corporate Responsibility (IRRCi) commissioned Trucost to examine the greenhouse gases emitted by large cap US companies listed in the S&P 500 Index. The analysis covered 497 constituents of the Index covered by Trucost using data as of 28 February 2009. Financial data was not available for the remaining three companies, which listed in the Index during 2008. Trucost assessed company greenhouse gas emissions in 19 sectors, using the Industry Classification Benchmark (ICB) system.


Based on Trucost's standardized, comprehensive data on the 497 companies, Carbon Risks and Opportunities in the S&P 500 includes analysis of:

  • Absolute greenhouse gas emissions at a company and a sector level in 2007. This analysis includes emissions from global operations and not just those emitted within the US. Carbon exposure is therefore assessed on a global basis.
  • The carbon intensity of companies and sectors in the Index. Quantities of GHG emissions are normalized by revenue to compare the carbon performance of companies of different sizes and industries. Carbon intensity is expressed as each ton of carbon dioxide equivalent(CO2-e) emissions per million US Dollars of revenue. Unless stated otherwise, the currency used throughout this report is US Dollars ($).
  • The carbon intensity of the S&P 500 Index relative to MSCI World, MSCI Europe and MSCI Asia ex-Japan indices.
  • The exposure of S&P 500 companies to carbon costs under cap-and-trade programs.

Why did IRRCi commission the research?

The Investor Responsibility Research Center Institute's mission is to provide thought leadership at the intersection of corporate responsibility and the informational needs of investors. This study incorporated Trucost analysis of direct greenhouse gas emissions from operations, as well as company supply chain emissions, including electric utilities. Companies and sectors are compared on both absolute emissions and carbon intensity, defined as emissions per million dollars (USD) of revenue.


Carbon intensity allows for comparison of the relative carbon performance and exposure of companies of different sizes and sectors. Trucost also examined the potential carbon costs that could be incurred by S&P 500 companies if carbon pricing were applied to their emissions. This is a particularly relevant issue in light of the Obama Administration's proposed carbon trading scheme, which would apply a cost to over 85% of greenhouse gas emissions in the US.