INSIGHTS Opinion

Recent years have seen an increase in public climate change disclosures from companies due to increases in mandatory reporting policies, however many companies still do not publicly report their emissions. Despite this, investors are integrating climate scores into their investment decisions. How? Estimating emissions using models; the current climate rating system offers metrics for upwards of 10,000 companies.

This strategy prevents investors from accurately managing risk, as there is no way to differentiate between the companies that are reporting and taking the lead on climate action, and those that are not. Consequently, non-reporting, high emitting companies are not incentivized to report. Furthermore, insufficient disclosures indicate that companies may not have a full understanding of their impact. Companies may appear to be taking steps to reduce their impact on climate change, but without public scrutiny of the data, this cannot be verified.

In this webcast, Dr. Rebecca Thomas and Emily Matthews from Arabesque S-Ray speak about the current challenges and opportunities surrounding carbon data and its relevance to the investor community.

Download the webcast via FactSet to learn more (link)