Carbon Impact Analytics, Carbone 4’s advanced approach to carbon footprinting, is one of three methodologies being compared by the French pension fund Ircantec as part of a four-year roadmap to align the institution’s portfolio with a 2°C climate trajectory.
The ambitious strategy was adopted unanimously by Ircantec’s new board of directors on April 5, 2016 and announced a few days later by Ircantec President Jean-Pierre Costes. The announcement follows a decision made in 2012 to manage the entirety of the institution’s reserve, 9.2 billion euros as of the end of 2015, according to criteria outlined in Ircantec’s SRI charter. Ircantec has proved itself to be an early mover in the SRI domain. A sum of 300 million euros, or 7% of the fund’s fixed-income securities, is already invested in green bonds, issued primarily by the European Investment Bank and the Ile-de-France region. Ircantec has also made efforts to reduce its exposure to coal, which it plans to eliminate entirely, as well as to reduce the energy consumption of its real estate assets through major renovations.
The fund’s recent actions to specifically target the carbon impact of its investments arrive just in time to meet the new obligations of Article 173 of the French Energy Transition Law, viewed by Mr. Costes as an opportunity rather than as a burden. Ircantec will publish its footprint annually starting in 2017 and use this information to drive emissions reductions over time. The institution states that it will “not exclude major disinvestments from ‘depreciable assets’, notably the fossil fuel sector.”
To analyze the footprint of its stocks and bonds over the next four years and contribute to the global development of comprehensive and reliable footprinting methods, Ircantec will compare three different methodological approaches, including Carbon Impact Analytics. This Carbone 4 methodology innovates by going beyond the standard carbon footprint via detailed bottom-up analysis of a portfolio’s underlying firms. The in-depth analysis includes estimation of upstream and downstream indirect (Scope 3) emissions, as well as avoided emissions and forward-looking indicators (capital expenditures, GHG reduction commitments and progress, etc.) that gauge a company’s contribution to the energy and climate transition. To learn more about Carbon Impact Analytics, click here.