Climate Impact Assessment of Nasdaq Helsinki
Executive summary
The climate impact of investors has over the past year been propelled to the top of the climate change agenda. While investors launched initiatives such as the PRI’s Montreal Carbon Pledge1 and the UNEP’s Portfolio Decarbonization Coalition2 to report on investment emissions and reduce greenhouse gas exposure, organizations such as 350.org have become testimony to a growing civil society movement that both puts pressure on investors and significantly raises awareness on the link between investments and climate change. Governments are also on the move, with the French finance minister recently implementing new legislation3, which makes it obligatory for institutional investors to analyse and disclose the carbon footprint of their investments.
The leading climate change specialist, South Pole Group (SPG), together with Oekom Research AG (oekom) have been commissioned by Sitra to assess the climate impact of the companies listed on Nasdaq Helsinki Main Market for the financial year 2014, reported in 2015. The results were compared against the equivalent impact of four other indexes; Nasdaq Stockholm, MSCI World, DAX and Eurostoxx 50, with a particular focus on the comparison with the Nasdaq Stockholm. This amounted to an analysis of the climate impact of 130 individual companies for their carbon footprint.
Investing one million Euros in the companies listed on Nasdaq Helsinki results in financed emissions (Scope 1 & 2) of 236 tCO2e (294 in the previous year), while an equivalent investment in the Nasdaq Stockholm results in 66 tCO2e, resulting in an under-performance of 257%. Furthermore, considering the indirect emissions from supply chains and product usage (Scope 3), the results of Nasdaq Helsinki listed companies shows an under-performance of 203% against the Nasdaq Stockholm, where the financed emissions amount to an annual total of 716 tCO2e (893 in the previous year) and 237 tCO2e respectively.
Additionally, the financed emissions by revenue was calculated, with 331 tCO2e in 2016, a 6% reduction from the 353 tCO2e in 2015. This is a more realistic decrease than the 20% reduction in pure financed emissions against 2015, as it does not reflect the changes in the market cap of the companies in the portfolio.
As part of the study, Finnish investors receive free access to an Excel based tool allowing them to run their own Finnish investments against the companies listed on Nasdaq Helsinki. The tool can be found on Sitra’s website, www.sitra.fi.
1http://montrealpledge.org/
2http://unepfi.org/pdc/
3 This refers to Article 173 of the French Energy Transition Law, which came into effect on 1 January 2016
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