Carbon Footprints

A Carbon Footprint is a measure of the impact our activities have on the environment in terms of the amount of green house gases produced, measured in units of carbon dioxide. The ethical investor can minimise their personal impact on climate change by taking steps to reduce their CO2 emissions. For ethical investors, avoidance of all CO2 emissions will be impossible – in this case, Carbon Offsetting plays a vital role. However, significant reduction of CO2 emissions is possible by taking into account the carbon footprint of your investment portfolio on a fund by fund basis.

By taking into account the environmental impacts of all the major companies, Trucost studied both ethical and mainstream investment funds, with over 80% of their portfolios invested in the UK, and calculated the greenhouse gas emissions for which these companies were responsible. The emissions were then converted to carbon dioxide equivalents (C02e) based on 'Global Warming Potential' factors. The total CO2e emissions attributed to each fund were calculated based on the percentage holdings of each stock in the fund and their corresponding emissions. In order to compare the results, the CO2e emissions of each fund are divided by the size of the fund (£mn) to give a Carbon Footprint allowing valuable comparisons with other funds.

The table below shows the carbon footprints of 10 mainstream ethical investment funds.