Russian Stock Market at Risk From Climate Change Policy

Unsurprisingly, the energy heavy stock market of Russia carries the largest carbon risk while Australian companies fair well

Dan Lefkovitz 4 October, 2018 | 8:45AM

Morningstar's Carbon Metrics allow investors to examine the environmental impact and the risks posed by climate change to their portfolios.

Carbon Intensity measures a portfolio's carbon footprint by gauging greenhouse gas emissions per millions of dollars of revenue. Carbon Risk relies on Sustainalytics' assessment of the degree to which corporate value is at risk from climate change and the shift away from fossil fuels. So, Carbon Intensity provides the current picture, while Carbon Risk is forward-looking.

Map of Carbon Intensity Scores

To compute Carbon Intensity, Sustainalytics looks at companies' total greenhouse gas emissions per millions of dollars of revenue. The world's least-carbon-intensive equity markets include Peru and the United Arab Emirates owing to the small carbon footprints of the banks, telecoms, and property companies that dominate those indexes.

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About Author

Dan Lefkovitz

Dan Lefkovitz  is content strategist for Morningstar’s Indexes group

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