Carbon ‘scorecard’ tracks corporate tilt away from fossil fuels

Carbon emissionsCarbon emissions from global-listed companies fell in 2017 as corporations increased their share of renewable power generation and decreased reliance on fossil fuels.

Analysts who compiled the annual S&P Dow Jones Indices Carbon Scorecard said that the greatest progress towards emissions reductions last year was in Asia.

The scorecard found that companies in S&P indices globally increased their use of green energy and reduced reliance on fossil fuels – with the exception of the S&P/ASX All Australian 50 and S&P Asia 50 indices.

The largest decrease in absolute emissions, of 45%, was recorded by firms in the S&P Asia index.

Reductions in absolute emissions were also recorded in the S&P Global 1200 index, which captures around 70% of global equity capitalisation, and four of its constituent regional indices: S&P Europe 350, S&P Latin America 40, S&P/ASX All Australian 50 and the S&P Topix 150.

The report’s authors said there was clear evidence of firms reducing their carbon emissions since the report was first published in 2015.

“Understanding carbon risks and their potential financial impact is crucial if we are to avoid sudden and inconsistent write-downs of assets and redirect capital toward activities that are aligned with global climate commitments,” said Jessica Taylor, one of the authors of the report.

“Globally, more than one-quarter of all professionally managed assets are now managed under responsible investment strategies.

“In 2019 we will undoubtedly see continued innovation as investors seek to drive better financial outcomes in combination with reducing exposure to carbon risks.”

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