Visualized: An Investor’s Carbon Footprint, by Sector
Visualized: An Investor’s Carbon Footprint, by Sector
In the quest for a sustainable future, investors can play a crucial role in shaping our planet’s destiny.
Understanding the carbon emissions in different sectors is a key way to make environmentally and financially conscious decisions and help make a positive impact on the planet.
This infographic, sponsored by MSCI, looks at carbon emissions by sector.
Types of Carbon Emissions
Unsurprisingly, industries heavily reliant on fossil fuels and energy-intensive processes, like energy, materials, and industrials, have significant carbon footprints. In contrast, service-based and technology industries are traditionally less carbon-intensive.
To get an accurate picture of a sector/industry’s carbon footprint, it’s important to look up and down their value chain. Here is how policymakers categorize carbon emissions:
- Scope 1: Generated directly by the organization and within its control e.g., on-site fuel combustion and internal industrial processes.
- Scope 2: Indirect emissions from energy use, such as purchased electricity, heat, or cooling.
- Scope 3: Indirect emissions, but different from Scope 2 emissions. These are emissions that the company does not directly control such as the emissions produced from a supplier or emissions generated from the use of its sold product.
Only looking at all three scopes of emissions can we arrive at a complete picture of a sector’s carbon footprint.
Volume of Carbon Emissions, by Sector
The following table breaks down the greenhouse gas emissions for each sector by scope. A sector’s carbon footprint is expressed in metric tons of CO2 equivalent for every $1 million in financing.
In other words, here’s how much of a climate impact a one million dollar investment has in each of the following sectors.
The total figure represents the weighted average carbon emissions of each sector’s constituents as of August 10, 2023:
| Sector | Scope 1 | Scope 2 | Scope 3 | Total |
|---|---|---|---|---|
| Energy | 263.3 | 27.2 | 2827.5 | 3118.0 |
| Materials | 298.4 | 82.8 | 1349.2 | 1730.4 |
| Utilities | 461.4 | 16.0 | 405.5 | 883.0 |
| Industrials | 32.6 | 8.3 | 425.1 | 466.0 |
| Consumer discretionary | 5.0 | 9.0 | 372.2 | 386.2 |
| Consumer staples | 16.5 | 12.4 | 276.4 | 305.3 |
| Information technology | 2.0 | 5.8 | 79.3 | 87.1 |
| Health care | 1.8 | 2.4 | 70.9 | 75.1 |
| Financials | 4.0 | 1.1 | 58.3 | 63.4 |
| Real estate | 1.4 | 5.9 | 46.8 | 54.0 |
| Communication services | 0.6 | 4.7 | 40.5 | 45.8 |
Represented by tCO₂e/USD million EVIC. EVIC is the enterprise value including cash.
Understanding carbon footprint profiles can help investors evaluate the risks faced by carbon-intensive industries, such as future regulations and reputational challenges.
MSCI’s climate metrics empower investors to make responsible investments and drive meaningful change.
Download MSCI’s Climate Metrics Report.
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