Scientific Beta

Money: "Targeting low-carbon emissions is a worthy pursuit in equity portfolios but mixing ESG and carbon scores in equity portfolio weighting schemes can come at great carbon cost for green investors, according to a new study from global index provider and research house Scientific Beta. "The green dilution is very strong, regardless of which ESG factors and scores are targeted as objectives, with our research revealing an average dilution of 92% across our portfolios," says Scientific Beta head of investment solutions Erik Christiansen."

Money 02/02/2024

"(...) Targeting low-carbon emissions is a worthy pursuit in equity portfolios but mixing ESG and carbon scores in equity portfolio weighting schemes can come at great carbon cost for green investors, according to a new study from global index provider and research house Scientific Beta. "The green dilution is very strong, regardless of which ESG factors and scores are targeted as objectives, with our research revealing an average dilution of 92% across our portfolios," says Scientific Beta head of investment solutions Erik Christiansen. "In other words, adding combinations of ESG scores to carbon intensity as a weight determinant in developed equity portfolios dilutes 92% of the initial carbon reduction objective. Only 8% of the carbon reduction objective survived the inclusion of ESG scores in portfolio weighting schemes." (...)"