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Decarbonising portfolios may deliver better returns

The concern is that the price of emissions will escalate in the form of carbon tax or other more onerous regulation.

A SENSE of urgency on the financial impact of carbon emissions is prompting some institutional investors to take action to hedge their portfolios' greenhouse gas exposures.

To facilitate this, Amundi Asset Management has taken a leading role in helping to design indexes that give exposure to a market benchmark such as MSCI World - but with a lower carbon footprint, and with as few compromises on sector exposures as possible.

There are at the moment three MSCI Low Carbon Leaders indexes based on the MSCI World, MSCI Europe, and MSCI North America.

These were designed by Amundi, together with MSCI itself, Swedish National Pension Fund AP4, and FRR of France (Fonds de Reserve pour les Retraites). AP4...

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