Key findings:

• The companies directly emitted almost 109 million tonnes of GHG emissions, measured in carbon dioxide equivalents (Mt CO₂e) globally, which equates to 20% of South Africa's carbon emissions in 2010.
•  If the companies were to pay the planned carbon tax rate of R75 (US$8.97) per tonne of CO₂e for direct operational emissions globally, carbon costs could amount to almost US$974 million, or 1% of earnings before interest, taxation, depreciation or amortization (EBITDA) on average across all 40 companies.
• Earnings could be most exposed to carbon costs in the Oil & Gas, Basic Resources, Retail, Industrial Goods & Services and Food & Beverage sectors. Some companies are more exposed to indirect carbon costs passed on by suppliers than to direct costs from operational emissions.
• Eight of the funds analysed invested in stocks that were more carbon-intensive on average than Index sector peers.
• Portfolio exposure to carbon costs varies, with the carbon footprints of equity funds ranging from 387 tonnes of carbon per US$m revenue for the Nedgroup Investments Rainmaker Fund to 1,151 tonnes of carbon/US$m for the Allan Gray - Stable Fund.
• Carbon risk could be reduced by re-weighting JSE-listed companies based on carbon efficiency within sectors.
• The study highlights 10 question that pension funds and unit trust owners; asset managers and investment analysts; and companies can ask to address carbon and other sustainability-related risks and opportunities.

Report image: Variations in exposure to carbon costs at the higher carbon tax rate of US$23.91 (R200) per tonne

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