Assessing the Carbon Footprint of the World's Largest Asset Managers, Europe leading the pack?
Research published recently by MSCI shows that the largest European asset managers are slightly less carbon-intensive (the emission rate of a pollutant relative to the intensity of a specific activity) than their U.S. counterparts. Relative to the European asset managers, each additional trillion USD lead to an extra 10-20 tons of CO2 emitted.
The largest 10 asset managers globally represent around 25% of the 110 trillion USD that is invested in funds globally, nine of them are signatories to the Net Zero Asset Managers initiative (NZAM). The difference in carbon-intensity seems to be that European fund providers have a greater amount of European companies within their fund strategies, who are better positioned to addressing environmental risks. This is in alignment with findings from the NZAM progress report and corporate disclosures, which indicate that European asset managers (within this sample) have a higher percentage of their AUM (assets under management) committed to net zero strategies.
There seems to me no correlation between asset class and carbon intensity; however, some correlation between AUM and emissions – this is likely due to larger size having a greater breadth of product offerings across geographies and sectors.
Read more on MSCI here.