Mercer to Size Up Carbon Footprints

Mercer said it can now provide clients with a carbon footprint analysis of their portfolios, and compare it to a chosen benchmark, such as the FTSE All-Share, S&P 500, or Russell 1000.

This new client offering comes as Mercer said more institutional investors have expressed an interest in assessing and better managing the risks and opportunities associated with the impact of their investments on the environment and climate change.

Mercer will develop “carbon footprint” analyses via use of the Style Research Portfolio Analyzer (SRPA) tool that can now integrate relevant information from Trucost Plc, an environmental data provider.

Footprint Defined

A portfolio’s “carbon footprint” is a measure of the impact that a company has on the environment in terms of the amount of greenhouse gas emissions produced. Through this relationship with Trucost, Mercer is the first global investment consultancy to provide carbon footprint analysis to clients, according to the announcement.

Trucost provides data and analysis on company emissions and natural resource usage in financial as well as quantity terms to help investors, fund managers, and analysts understand how environmental issues could affect companies’ future earnings.

“This new tool will allow us to help clients understand the carbon exposure of their equity investments. Acting as an indicator, the carbon footprint and additional analysis will enable our team to work with clients to “green’ their portfolios,’ said Danyelle Guyatt, principal at Mercer. “In addition, providing this type of information to clients will better equip them to raise climate change issues with their investment managers in a way that is systematic and comparable across managers.’