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.

24 October, 2019
Events Hong Kong Thought Leadership Seminar Eyes On Asia – Restocking The Investment Toolkit

As investment strategies continue to evolve, investors have a more sophisticated set of tools available to help navigate different economic cycles and market conditions – ranging from factor-based investing and ESG to multi-asset solutions. Join S&P DJI and leading financial professionals to keep pace with the latest investment strategies that can help investors stay...

Find out more
1 October, 2019
Events Cooler Earth Sustainability Summit – Kuala Lumpur – 1st & 2nd Oct

Join global experts and local champions to not just dialogue, but motivate collective and collaborative action, mobilise resources, finance, and the political will to counter environmental degradation, social inequity, and economic depression.

Find out more
Publication / 10 Sep 2019 Carbon Scorecard 2019

This years' Scorecard has expanded coverage to cover 13 indices and 6 metrics. For...

Read publication