The Climate Impact of the OSEBX Index Summary 11 November 2014

Transcription

1 The Climate Impact of the OSEBX Index Summary 11 November 2014 Dr. Maximilian Horster, Partner, South Pole Group Fredrik Fogde, Project Manager, South Pole Group This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from South Pole Carbon Asset Management Ltd. This material was used by South Pole Carbon Asset Management Ltd during an oral presentation; it is not a complete record of the discussion.

2 South Pole Group Measuring and reducing impact About us 2006: Incorporation in Zurich / Switzerland 2014: present on all continents 110 carbon pros from 22 countries 250+ projects in over twenty-five countries Swiss Social Entrepreneur of the Year 2011 to 2014: Best Project Developer corporate and public clients Our impact for our clients 50 million+ tonnes of CO 2 savings EUR 6bn renewable energy investments Gwh renewable energy Numerous health and education benefits new jobs in developing countries hectares of forest saved 2

3 South Pole Group references: Some Clients and Partners from the financial industry

4 NorSIF asked about the Climate Impact of the OSEBX Alfred Berg Argentum Cultura Bank Danske Capital DNB DNV GL EY Fellesordningen for AFP Finansdepartementet Folketrygdfondet Gjensidigestiftelsen KLP MP Pensjon Nordea Odin OVF Pensjonskasseforeningen Skandiabanken Sparebankstiftelsen DNB Storebrand Sustainalytics

5 The Climate Impact of OSEBX Deliverables Findings Summary Data Analysis Screening Tool 5

6 Investment Impact on the Agenda The Business Case and Application OSEBX Analysis 6

7 Every Euro invested either finances or reverses Climate Change 7

8 Investors in the spotlight Investors ( ) should increase transparency regarding greenhouse gas emissions from the assets and businesses that they finance. UN Secretary-General Baan Ki-moon 8

9 Politics closing in We urge the AP pension funds and other institutional investors, as a first step, to increase transparency and to explore the possibilities for reporting the CO2 emissions associated with their investment portfolios. Peter Norman, Swedish Finance Market Minister, August 2014 Page 9

10 Portfolio Decarbonisation Coalition (PDC) Leading institutional investors have joined forces to substantially reduce the carbon footprint of US$100 billion of institutional investment worldwide. 23. September 2014 at the UN Climate Summit 2014

11 Montreal Carbon Pledge US$ 3 trillion of portfolio transparency commitment in time for the UN Climate Change Conference in Paris in December 2015 We need to put the Montréal Carbon Pledge on steroids. Christina Figueres, Executive Secretary of UNFCCC, 26. September 2014

12 Investment Impact on the Agenda The Business Case and Application OSEBX Analysis 12

13 It makes financial sense: Climate Risks & Opportunities of Investments Source: CDP

14 Climate Impact Assessment & Action South Pole Group measures the climate impact of investments Investors manage investment climate impact and report to stakeholders Page 14

15 Investment Impact on the Agenda The Business Case and Application OSEBX Analysis 15

16 OSEBX Analysis 16

17 Approach Climate Impact of investing into the Oslo Stock Index OSEBX Comparison to individual NorSIF members investments Recommendations Source: South Pole 17

18 OSEBX is relatively climate intense The OSEBX consists of 52 companies The overall market capitalisation is at about NOK 2 trillion NOK invested into the OSEBX finances 40KG of CO 2 e This is less than the STOXX 50 Index but over 4x more than the SIX PX Sweden. Financed Emissions of Selected Indices per NOK 1'000 Index Country Kg of CO 2 e SIX PX Sweden 9 SMI Switzerland 11 MSCI UK ALL CAP UK 25 FTSE All World Global 33 OSEBX Norway 40 STOXX 50 Europe 57 18

19 Sector Analysis The sectors Materials, Energy and Industrials account for 54% of the weighting, but for over 90% of the financed emissions. 19

20 Transparency of OSEBX 20

21 Screening tool 21

22 Output of screening tool: OSEBX comparison with sample portfolio Investors input own portfolio data in screening tool Generate report showing how their portfolio measures up to the OSEBX in terms of key quantitative indicators such as: total emissions Percentage of disclosing titles emissions intensity *Table shows calculations based on fictive sample portfolio, for illlustrative purposes only 22

23 Attribution Analysis Tool also shows how sector allocation and stock selection contribute to the portfolio's under- og outperformance of the benchmark in terms of CO2 23

24 OSEBX: Climate Impact Assessment 24

25 Forward - looking Analysis Increasing action in carbon management

26 Risk/ Opportunity Management 26

27 Recommendations Measure & Set Targets Measure the climate impact of your full portfolio Set reduction targets for yourself and your asset managers Create Transparency Report your portfolio s climate impact to your stakeholders Join the «Montreal Pledge» Take Action Join the Portfolio Decarbonisation Coalition Engage with investees on disclosure and climate strategy Join Force Leverage initiative for a public debate on investment climate impact Create Norwegian engagement initiative for Norwegian investees 27

28 Example: Communicate 28

29 Many thanks! Maximilian Horster Fredrik Fogde