Carbon intensity of the Sustainable Future equity funds

Using the Alliance Trust Sustainable Future UK, European and Global Growth funds as a proxy for our equity strategies we analysed how much carbon dioxide (CO2) is emitted from a unit of investment in these funds as compared to the to the conventional benchmarks in which they invest for the three years from 2009-20112.

On average, these funds emitted less than half the carbon dioxide than the conventional benchmarks (0.43 carbon intensity versus the benchmark of 1). Figure 1 shows the simple average of the carbon intensity (amount of CO2 emitted per unit of equity investment in the company) for these for the period and Figure 2 shows the reduced carbon dioxide emissions from these funds as compared to their conventional benchmarks.

So what?

If you can generate similar or better than the market investment returns by investing in companies that emit significantly less CO2 than average, then this way of investing can be seen as less damaging to our collective environment, less at risk from regulation to curb CO2 emissions and a more a sensible and proactive way of investing. We also think there are some good investment opportunities in companies that are providing energy efficiency products as well as substituting more polluting ways of meeting the same needs. Climate change and reducing carbon intensity is only one of many sustainable investment themes that we are trying to identify and invest along.

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