Trucost analysed the carbon footprint of the S&P/IFCI Carbon Efficient Index, which enables investors using the index as a benchmark to shift assets towards carbon-efficient companies. This could help encourage listed companies in emerging markets to compete for capital on carbon efficiency and make the transition towards low-carbon fuels, technologies and processes.
The main findings are that companies in the S&P/IFCI LargeMidCap Index emit 563 metric tonnes of GHGs, measured in carbon dioxide equivalent (CO2e), per US$ million of revenue on average. Emerging-market equity funds could be more exposed to rising carbon costs than portfolios benchmarked against developed market indices such as the S&P 500 and MSCI Europe. However, the S&P/IFCI Carbon Efficient Index, which contains the same constituents as the S&P/IFCI LargeMidCap, but with index weight adjustments to reduce exposure to carbon emissions, has a smaller carbon footprint at 440 tCO2e/US$ mn.