How can investors gain confidence that an equity portfolio is invested in companies that are really helping to address climate risk? Focus on a company’s carbon handprint, which measures the positive impact, or carbon avoided, by using its products. By combining an assessment of carbon handprints with research of business fundamentals, we believe investors can create a portfolio of companies with superior long-term return potential that are providing solutions to the world’s biggest climate challenges.
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How can investors gain confidence that an equity portfolio is invested in companies that are really helping to address climate risk? Focus on a company’s carbon handprint, which measures the positive impact, or carbon avoided, by using its products. By combining an assessment of carbon handprints with research of business fundamentals, we believe investors can create a portfolio of companies with superior long-term return potential that are providing solutions to the world’s biggest climate challenges.
Transitioning to a net-zero carbon economy* is vitally important, and corporate bonds will play a critical role in the transition. To support that journey, sustainable investors should monitor the carbon impact of the corporate bonds in their portfolios. But there’s a lot more to understanding a bond portfolio’s carbon footprint than conventional metrics can show.
ESG in Action As climate change intensifies, so do the physical and transition risks to industries and companies. But how do investors quantify those changes? Historically, they’ve measured a portfolio’s climate impact based on its carbon footprint or weighted average carbon intensity. Today, there are more robust and meaningful approaches—but fundamental insight still holds the key to interpreting the results.
Sarah Tunnell: Ed, thanks so much for taking some time today. I know you recently put out a very detailed paper on the topic of synthetic biology, but could you give us a short overview into what that really is?
