The carbon footprint of capital investments

Braunkohleveredlungswerk VEB BV Espenhain mit Braunkohlekraftwerk, Brikettfabrik und Schwelerei einer der groessten Dreckschleudern der DDR. Espenhain. 20. Dezember 1989

How can the greenhouse gas intensity of various financial investment products be comparably calculated? On behalf of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and in cooperation with INrate, adelphi calculated the Carbon Footprint of saving deposits, stocks, certificates, mutual stock funds and pension funds by analysing fifty financial investment products. The outcome: An average German investment portfolio relates strongly to greenhouse gases. Five tons of greenhouse gas emissions are co-financed per 10.000 Euro invested in conventional investments.

Climate friendly investments reduce the emissions by 42 percent on average. Particular product categories can realise emission cuts between 35 percent and 87 percent. The results however disperse greatly within single product categories: If you, for example, invest your money in a climate fund, there is no guarantee that you finance less greenhouse gas emissions than with investing your money in a conventional fund. The study showed that the Carbon Footprint is a useful tool to enhance transparency for investors and financial product designers regarding the impact of financial investment products on the climate.

Publications of this project