Publication / 11 Apr 2011

Taking Carbon Risk into Account

AXA Investment Managers used Trucost data to analyse the impact of carbon risk for investors.

The purpose of the research was to analyse the impact of carbon risk for investors on the European market in general and the UK market in particular. A classification of solutions for investors wanting to incorporate carbon risk, and thus climate risk, into their management strategy is also presented.


Starting from 2012, the European sectors covered by the carbon quota system of the EU ETS (Utilities, Building Materials, Oil & Gas, Basic Materials, Airlines, Maritime Transport) will be financially impacted by the entry into phase III. Moreover, other sectors are potentially and indirectly affected by an increased carbon cost, such as the Automotive, Capital Goods, Chemicals, or even the Food & Beverages sectors, a significant share of the “bottom line” of which is exposed to carbon risk.

Although the market is still struggling to incorporate the carbon risk that weighs indirectly on the economic fabric, with regard to the UK market, the “Low-Carbon” strategies constructed from direct GHG emissions have paid off over the past five years on average for most of the sectors most exposed to carbon risk. In addition, the volatility of these strategies is slightly lower.

3 February, 2020
Events Green Finance Summit – Phoenix – 3 – 4, 2020

The GreenFin Summit follows a successful launch event in 2019. That invitation-only event brought together 100 corporate sustainability leaders, major public-sector pension fund executives and leading financial institutions, with over a trillion dollars of combined assets under management. The discussion broached vital topics in ESG that will be expanded upon at the 2020 Summit. Richard Mattison...

Find out more
Trucost News / 26 Nov 2019 Trucost launches Physical Risk Analytics to help assess risks and opportunities from climate change

New dataset and analytics enables investors, companies and governments to weigh risk of companies’ assets from physical impacts of climate change

Read news
Publication / 25 Nov 2019 Understanding Climate Risk at the Asset Level: The Interplay of Transition and Physical Risks

How could the interplay between regulatory transitional risks and physical risks impact the performance of companies across sectors and geographies?

Read publication