Scientific Beta

Attempts to reduce the carbon intensity of an equity portfolio can lead to inconsistency between decisions at the stock specific level and many climate-aligned strategies. At this Reponsible Investor webinar, Scientific Beta will demonstrate how this portfolio greenwashing can be both measured and avoided. 

When one speaks of reducing the carbon intensity or even the temperature of an equity portfolio, one makes the implicit assumption that this reduction will really be part of the fight against climate change by having a direct impact on the temperature or the carbon intensity of the issuers of the stocks contained in the portfolio. 

For these improvements in the climate characteristics of the portfolio to be effective in the real economy, the investment or divestment decisions need to be consistent with the climate performance and engagement of the companies that make up the portfolio. It is this consistency that guarantees that the metrics displayed by the investor at the portfolio level result in improvements in the same metrics in the real economy. Besides, even though many investors engage companies on their investments, on changes in their production methods, or even on changes in the production itself in order to comply with climate alignment trajectories in their sector, the credibility and therefore the effectiveness of these engagements supposes consistency with the investment decisions of these same investors. In particular, the Paris Aligned Investment Initiative (PAII) Framework states that one of the key elements of a "Paris aligned stewardship approach" is to develop an engagement strategy with a feedback loop to portfolio construction.

Unfortunately, this consistency in stock-level investment decisions is rarely found in many climate or Paris-aligned investment strategies, which showcase their carbon intensity reduction trajectory or the improvement in the temperature of the portfolio without there being any chance of finding these improvements at the company level. This portfolio greenwashing can be both measured and avoided. This is the objective of the webinar presented by Scientific Beta, which constitutes a genuine practical guide to preventing portfolio greenwashing.

The webinar will be presented by Noël Amenc, Associate Professor of Finance, EDHEC Business School (Singapore) and the founding CEO of Scientific Beta, Erik Christiansen, ESG and Low Carbon Investment Specialist, Scientific Beta and a former Head of Investment Strategy at ERAFP, and Felix Goltz, Research Director, Scientific Beta, and will be moderated by Daniel Brooksbank of Responsible Investor.