Publication / 11 Dec 2007

Carbon Counts Asia 2007: The Carbon Footprints of Asian Investment Funds

Trucost study of the carbon footprints of 90 equity funds in Asia and the MSCI Asia ex-Japan Index.

Carbon Counts Asia 2007 examines the carbon footprints of the MSCI Asia ex-Japan index and 90 funds in Asia for the first time. The report identifies potential opportunities for fund managers to control and measure the risks associated with carbon emissions in their portfolios without sacrificing returns.

The International Finance Corporation commissioned Trucost to undertake this study in order to measure the carbon impact of these funds and to identify the potential to reduce associated risks. Among the key findings are that the MSCI Asia ex-Japan index is more carbon intensive than the MSCI All World Developed, S&P 500 and MSCI Europe indices. This suggests that investors in Asian equities have a relatively higher exposure to the cost of carbon emissions.

Carbon-intensive companies in the utilities and basic resources sectors contribute most to the carbon footprint of the MSCI Asia ex-Japan index. The carbon intensity of 54 out of 90 funds of Asian companies analysed is greater than that of the MSCI Asia ex-Japan index. The carbon footprints of funds analysed varies dramatically: the diversified fund with the biggest footprint is over 90 times more carbon intensive than the diversified fund with the smallest footprint.

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