Mercer announced today that it can now provide clients with a ‘carbon footprint’ analysis of their portfolio/s, and compare it to a chosen benchmark, such as the FTSE All-Share, S&P 500 or Russell 1000.
This new client offering comes as more institutional investors have expressed an interest in assessing and better managing the risks and opportunities associated with the impact of their investments on the environment and climate change.
“This new tool will allow us to help clients understand the carbon exposure of their equity investments. Acting as an indicator, the carbon footprint and additional analysis will enable our team to work with clients to ‘green’ their portfolios,” said Danyelle Guyatt, principal at Mercer.
“In addition, providing this type of information to clients will better equip them to raise climate change issues with their investment managers in a way that is systematic and comparable across managers.”
Mercer will develop ‘carbon footprint’ analyses via use of the Style Research Portfolio Analyzer (SRPA) tool that can now integrate relevant information from Trucost, a leading environmental data provider.
A portfolio’s “carbon footprint” is a measure of the impact that a company has on the environment in terms of the amount of greenhouse gas emissions produced.
Through this unique relationship with Trucost, Mercer is the first global investment consultancy to provide carbon footprint analysis to clients.
“At Mercer we pride ourselves in being the pioneer and market-leader for responsible investment consulting. Adding the ‘carbon footprint’ capability further extends our comprehensive service offering to clients,” said Andrew Kirton, global head of investment consulting, Mercer.
Trucost Chief Executive, Simon Thomas, said: “Our partnership with Mercer means that Trucost’s leading database of corporate greenhouse gas emissions is available to a wider audience. It will help trustees better understand overall exposure of their funds to the rising costs of carbon inefficiencies.”
“Trustees can encourage fund managers to use carbon footprints to help identify and manage carbon risks and opportunities in existing portfolios, as well as to create carbon-efficient investment products,”added Neil McIndoe, Trucost Head of Environmental Finance.