Tell it to me straight: Portfolios with clear sustainability goals will win race to net zero

Deep Dive into fixed income

clock • 4 min read
Shawn Keegan and Salima Lamdouar of AllianceBernstein
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Shawn Keegan and Salima Lamdouar of AllianceBernstein

Transitioning to a net zero-carbon economy is vitally important. To support that journey, sustainable investors should monitor the carbon impact of their portfolios. But there is plenty more to understanding a bond portfolio's carbon footprint than conventional metrics can show.

Investors need straightforward reporting that can help them grasp how their portfolios affect the climate. Several providers, including MSCI, have created a range of carbon footprint metrics comparing a portfolio's carbon characteristics with a benchmark.  For bond investors, the most relevant metric is the weighted average carbon intensity of a portfolio, measuring the carbon footprint in terms of the volume of carbon dioxide emissions per value of sales (tons CO2e/$m). ESG investors prioritising climate change over diversity - research The metric has several benefits: it is appli...

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