European asset managers have a lower carbon footprint than their US counterparts according to new research from MSCI.
However the research, which looks at the carbon emissions of the assets under management of the 10 largest global asset managers found that the difference was ‘marginal’.
The research found that typically the larger the AUM, the larger the financed emissions. MSCI said that was particularly true at US fund managers in the research, where each trillion dollars invested led to an extra 10-20 tons of CO2.
However while MSCI says that ‘size matters’ when it comes to carbon emissions, asset class did not. The asset manager exhibiting the highest carbon intensity and financed emissions was a global bond fund manager with significant exposure to emerging markets and high yield debt. This MSCI research also found that asset managers with more carbon-intensive equity assets were likely to have more carbon-intensive fixed income assets.
The research also highlighted the need for asset managers with net-zero commitments to assess their entire book of assets to have a baseline for target setting and to be able to monitor alignment progress, alongside engagement and decarbonisation efforts.
MSCI said that assessing the carbon footprint of a portfolio is often the first step investors can take in addressing the investment implications of climate change.