Standard & Poor’s continues its push to create new market indexes focused on the environment, today announcing the S&P U.S. Carbon Efficient Index, designed to measure the performance of large cap, publicly-traded American firms whose carbon footprints are lower than their peers.
The new index provides a benchmark to the U.S. stock market, as represented by the parent S&P 500, while allowing investors to create financial products that seek to gain exposure from a more environmentally efficient perspective, S&P said in a press release.
"Organizations around the world are paying greater attention to the impact of greenhouse gases on our climate, as increasingly more investors consider carbon efficiency as an important investment theme," said S&P’s David Blitzer.
The index is comprised of constituents of the S&P 500 ranked by carbon footprint, as measured by Trucost, an environmental data organization which has quantified the environmental impact of over 4,500 companies in various industries around the world. Trucost has the world’s largest bank of greenhouse gas emissions data and carbon footprints measure the impact that a company has on the environment in terms of the amount of greenhouse gas emissions produced.
For this particular index, Trucost uses publicly-disclosed information on greenhouse gas emissions, such as annual and sustainability reports as well as other publicly-disclosed information, and engages directly with companies to verify its calculations. Nine greenhouse gases are included in the analysis, expressed as tons of carbon dioxide equivalent.
A company’s carbon footprint is calculated by taking that carbon dioxide equivalent and dividing it by annual revenues. Stocks in the S&P 500 are then ranked by carbon footprint to create the index. A smaller carbon footprint means lower contributions to climate change and less exposure to the rising costs of emitting carbon dioxide, S&P says in its explanation of the index’s methodology.
The top five companies by index weighting are Procter & Gamble, Chevron, Johnson & Johnson, AT&T and IBM. S&P already offers a number of other “green investing” indexes, including Asia Water, Global Eco, Japan Eco and Global Water.
Last year, Trucost teamed up with Mercer to create a carbon footprint analysis tool for institutional investors.
Showing posts with label carbon footprint. Show all posts
Showing posts with label carbon footprint. Show all posts
Monday, March 9, 2009
Thursday, January 29, 2009
Juicy: crunching the carbon footprint numbers
For those of us who think about our own carbon footprint, it’s safe to say that orange juice isn’t the first thing that comes to mind. However, PepsiCo, which makes Tropicana, one of North America’s most popular juice brands, recently revealed that a 64 ounce (about two litre) carton of Tropicana Pure Premium Orange Juice has a lifecycle carbon footprint of 1.7 kilograms.
In many ways, this is a laudable effort by PepsiCo. The company worked with The Carbon Trust to map the product lifecycle of Tropicana juice, including growing the oranges, getting the containers on store shelves, and disposing or recycling the packaging. At each stage, the trust added the equivalent carbon dioxide emissions to estimate the total greenhouse gas footprint of the product. PepsiCo says the Tropicana number creates “a verifiable benchmark against which the company can measure greenhouse gas reduction progress going forward.”
Still, the process raises a number of questions. Is 1.7 kilograms a “good” number in the beverage world? It’s hard to say, since PepsiCo is one of the first companies to publish this data, although it has pledged to reveal the same number for some of its other products, such as Pepsi-Cola, Diet Pepsi and Gatorade. But a little digging reveals that the Carbon Trust has also worked with U.K. grocery chain Tesco, and found that 64 ounces of Tesco’s 100% Pure Squeezed orange juice has a carbon footprint of about 2.9 kilograms.
Fiji Water calculated its own carbon footprint and posted the results online: about one kilogram for two litres of Fiji’s bottled water.
Critics say Fiji's numbers are nothing more than greenwashing. Pablo Paster, a sustainability engineer at Triple Pundit, calculates that the manufacture and transport of a one kilogram bottle of Fiji water consumes 26 kilograms of water and nearly one kilo of fossil fuel. Paster concludes that it takes nearly seven times as much water to make Fiji’s products than you actually drink. Food, or rather, drink for thought.
In many ways, this is a laudable effort by PepsiCo. The company worked with The Carbon Trust to map the product lifecycle of Tropicana juice, including growing the oranges, getting the containers on store shelves, and disposing or recycling the packaging. At each stage, the trust added the equivalent carbon dioxide emissions to estimate the total greenhouse gas footprint of the product. PepsiCo says the Tropicana number creates “a verifiable benchmark against which the company can measure greenhouse gas reduction progress going forward.”
Still, the process raises a number of questions. Is 1.7 kilograms a “good” number in the beverage world? It’s hard to say, since PepsiCo is one of the first companies to publish this data, although it has pledged to reveal the same number for some of its other products, such as Pepsi-Cola, Diet Pepsi and Gatorade. But a little digging reveals that the Carbon Trust has also worked with U.K. grocery chain Tesco, and found that 64 ounces of Tesco’s 100% Pure Squeezed orange juice has a carbon footprint of about 2.9 kilograms.
Fiji Water calculated its own carbon footprint and posted the results online: about one kilogram for two litres of Fiji’s bottled water.
Critics say Fiji's numbers are nothing more than greenwashing. Pablo Paster, a sustainability engineer at Triple Pundit, calculates that the manufacture and transport of a one kilogram bottle of Fiji water consumes 26 kilograms of water and nearly one kilo of fossil fuel. Paster concludes that it takes nearly seven times as much water to make Fiji’s products than you actually drink. Food, or rather, drink for thought.
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