The carbon benchmark was performed by Trucost®, a leading environmental data and analysis firm. Four of the five funds measured are already less carbon intensive than their benchmark indexes, and Pax World intends to set goals for further reducing their carbon footprint.
In addition, Pax World announced that it is taking steps to fully offset the carbon emissions of the Pax World Global Environmental Markets Fund (PXEAX), which is already a fossil fuel-free portfolio and will now become carbon neutral as well.
“We are pleased that Trucost’s findings seem to confirm that our sustainable investing approach generally contributes to lowering the carbon intensity of our mutual fund portfolios,” said Pax World President and Chief Executive Officer Joe Keefe. “But we want to take an even more proactive approach by further reducing our carbon footprint over time. Moreover, I am pleased to announce that our Global Environmental Markets Fund will henceforth be not only fossil fuel free but carbon neutral as well, which we believe makes it a uniquely attractive option for environmentally-conscious investors.”
Carbon benchmarking measures a fund’s carbon intensity, which is the total metric tons of carbon emissions per million dollars of revenue of the companies in its portfolio, as compared to the emission levels of companies included in a fund’s benchmark index. The fund’s share of the emissions is based on its proportional ownership of the stock of each company in its portfolio.
Carbon offsets allow investment portfolios to mitigate their carbon emissions by purchasing third-party verified CO2 offsets in the voluntary market. Carbon mitigation is achieved through financial support of projects that reduce greenhouse gas (GHG) emissions.
Carbon neutral fund
According to Trucost’s analysis, companies represented in the Pax World Global Environment Markets Fund generated carbon emissions totaling 13,102 tonnes. To offset these emissions and achieve carbon neutrality for the fund, Pax World is purchasing carbon offsets from projects that focus on the capture of methane gas emissions from landfills to produce electricity.
Pax World Climate Policies
In addition to its carbon mitigation efforts, Pax World avoids investing in companies with primary businesses in coal mining and production of oil from tar sands, two of the most environmentally destructive and carbon-intensive fossil fuels. In addition, Pax World seeks to avoid investments in any electric utility that relies on coal for power generation at levels above the national average, unless the utility demonstrates a significant commitment to renewable energy and is reducing its coal dependence.
Pax World also uses corporate shareholder engagement to urge companies to address climate-related risks and mitigate their emissions while supporting public policy advocacy initiatives to hasten a transition to renewable energy.
“The science is clear,” Keefe says. “If we are to avoid catastrophic global warming, we must take meaningful steps to reduce GHG emissions right now. Carbon benchmarking, carbon reductions and carbon-neutral portfolios can make a meaningful contribution to mitigating climate change.”
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About Pax World Management LLC
Pax World Management LLC, the investment adviser to Pax World Funds, is a recognized leader in sustainable investing, the full integration of environmental, social and governance (ESG) factors into investment analysis and decision making. Pax World launched the U.S. financial industry’s first socially responsible mutual fund in 1971. Today, Pax World offers a comprehensive platform of sustainable investing solutions including Pax World Funds, a family of actively managed mutual funds; ESG Managers® Portfolios, multi-manager asset allocation funds powered by Morningstar Associates; Pax MSCI EAFE ESG Index ETF (EAPS), the only international equity ETF available in North America that employs a sustainable investing approach; and separately managed accounts for institutional investors. For more information, visit www.paxworld.com.