Liontrust Sustainable Investment Annual Review 2022 - Flipbook - Page 27
Active mitigation of carbon exposure – SF funds’ average
21%
72%
less carbon emitted
than comparator indices
0%
of the portfolios invested
in companies offering
cleantech solutions
invested in fossil
fuel extraction
Source: MSCI Carbon Analytics Report, December 2022; average across SF UK Growth, SF European Growth, SF Global Growth and SF Corporate Bond Funds. For carbon
emissions coverage data, see the chart below:
We have been disclosing the portfolio carbon emissions for our
single strategy funds since 2012, which is carried out independently
using MSCI Carbon Analytics. On average, the SF funds emit
72% less carbon dioxide than the markets in which they invest,
have 21% exposure to companies whose products help to reduce
emissions, and hold 0% in companies exposed to the extraction
and production of fossil fuels (such as coal miner and oil and
natural gas exploration and production.
Average exposure of SF funds to companies offering cleantech
solutions
30%
24%
93%
21%
20%
15%
Average carbon emissions reduction in SF funds compared to
mainstream benchmarks
100%
23%
21%
10%
78%
72%
20%
Average
Bond
SF Corporate
SF UK Growth
40%
Growth
0%
51%
SF Global
60%
Growth
67%
SF European
80%
Source: MSCI Carbon Analytics/Liontrust, 31.12.22.
10%
Average
Bond
SF Corporate
Growth
SF Global
Growth
SF European
SF UK Growth
0%
Source: MSCI Carbon Analytics/Liontrust, 31.12.22. tCO2e/$m invested (uses
direct emissions, scope 1+2) from investee companies, cash and government bonds
are excluded. For SF UK Growth, carbon emissions data available for 76.2% of the
fund and 100% of the MSCI UK Index benchmark. For SF European Growth, carbon
emissions data available for 88.3% of the fund and 99.8% of the MSSCI Europe ex-UK
Index benchmark. For SF Global Growth, carbon emissions data available for 94.5%
In addition to funds emitting less carbon, there are important
positive attributes of low-carbon portfolios. Current climate change
policies, even if enacted, do not go far enough to limit the global
average temperature rise agreed in the Paris Accord. We believe
there will be an inevitable global tightening of regulations to limit
the amount of greenhouse gas being emitted, and in the event of
a tax on carbon, companies that can pass this on to customers
will not face a negative impact on margins (and profitability). In
contrast, companies unable to pass these costs on to clients will
have to bear it themselves. The very low carbon emissions coming
from businesses in the SF funds mean these portfolios will have
more resilient margins as carbon-related regulations tighten.
of the fund and 99.8% of the MSCI World Index benchmark. For SF Corporate Bond,
carbon emissions data available for 86.4% of the fund and 95.8% of the iBoxx Sterling
Corporates Index benchmark. All figures as at 31.12.22.
Fund-specific data on emissions are included in our SF funds’
sustainability and impact reports, which are updated every six
months and available at liontrust.co.uk.
Liontrust Sustainable Investment: Annual Review 2022 - 27