{"id":35371,"date":"2021-09-23T17:57:14","date_gmt":"2021-09-23T15:57:14","guid":{"rendered":"https:\/\/www.eticasgr.com\/?p=35371"},"modified":"2022-10-28T12:56:14","modified_gmt":"2022-10-28T10:56:14","slug":"carbon-footprint-tcfd-report-2021-valori-responsabili","status":"publish","type":"post","link":"https:\/\/www.eticasgr.com\/en\/storie\/insights\/carbon-footprint-tcfd-report-2021-valori-responsabili","title":{"rendered":"Carbon footprint &#8211; TCFD Report 2021 <br\/> Valori Responsabili"},"content":{"rendered":"<p>This document is an extract of the <strong>Task Force on Climate-related Financial Disclosures (TCFD<\/strong><a href=\"#_ftn1\" name=\"_ftnref1\"><strong>[1]<\/strong><\/a><strong>) aligned <\/strong><strong>Report released by the company ISS ESG<\/strong><a href=\"#_ftn2\" name=\"_ftnref2\"><strong><sup>[2]<\/sup><\/strong><\/a><strong> based on its proprietary methodology, in relation to the holdings of Etica Sgr\u2019s Linea Valori Responsabili Funds<\/strong>.<\/p>\n<p>All asset classes have been analyzed accordingly to the TCFD recommendations, grouped as follows: Equity Portfolio and Corporate Bonds Portfolio together and, Sovereign Bonds Portfolio.<\/p>\n<p>The data analysis reports <strong>climate<\/strong> <strong>performance achieved at the year-end 2020<\/strong>.<\/p>\n<p>The boundary of the analysis has been updated because the equity and corporate bonds portfolio have been grouped together to conduct the assessment at issuer level, for both asset classes.<\/p>\n<p>The related carbon metrics used in the Equity and Corporate Bonds analysis are the following ones (please refer to Appendix for more details):<\/p>\n<ul>\n<li><strong>Relative Carbon Footprint<\/strong>: a normalised measure, defined as the total carbon emissions of the Portfolio per million EUR invested. Any reference to relative carbon metrics in the Analysis refers to tCO<sub>2<\/sub>e\/EUR million Invested;<\/li>\n<li><strong>The Weighted Average Carbon Intensity (WACI):<\/strong> is the metric explicitly recommended by the TCFD for asset managers. The WACI allocates Scope 1 &amp; 2 GHG emissions based on Portfolio weights and has among its positive aspects the fact that is simple to calculate and easy to communicate to investors and, most notably, it can be applied across asset classes as it does not rely on the ownership approach. Any reference to carbon intensity in the Analysis refers to tCO<sub>2<\/sub>e\/EUR million Revenue.<\/li>\n<\/ul>\n<p>The Data Analysis goes beyond the sole carbon footprint assessment by providing various metrics<a href=\"#_ftn3\" name=\"_ftnref3\"><sup>[3]<\/sup><\/a> used to assess climate-related risks and opportunities in forward-looking perspectives. In the scope of this extract, for the Equity and Corporate Bonds Portfolio, results will be reported on Scenario analysis, Transitional climate risk and Carbon Risk Rating. For the Sovereign Portfolio results are referring to carbon footprint assessment.<\/p>\n<h2>Equity and Corporate bonds portfolio of Linea Valori Responsabili<\/h2>\n<h3>1. Relative Carbon Footprint<\/h3>\n<p>The Relative Carbon Footprint is crucial because it is based on the ownership principle, which is the key logic to the GHG protocol: <strong>one EUR million invested in the Equity and Corporate bonds Portfolio of the Linea Valori Responsabili is associated with 152.26 tCO2e<\/strong> and this is based on the investor\u2019s \u201cownership\u201d of the underlying companies.<\/p>\n<p>The Portfolio Scope 1 &amp; 2 emission exposure and Relative Carbon Footprint (tCO<sub>2<\/sub>e \/ EUR million Invested) are higher than the benchmark, mostly driven by higher exposure to the carbon-intense sectors such as Materials and Industrials.<\/p>\n<p><img class=\"alignnone size-full wp-image-35373 lazyload\" data-src=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1.png\" alt=\"carbon footprint vr-1\" width=\"100%\" srcset=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1.png 851w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1-300x158.png 300w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1-768x405.png 768w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1-400x211.png 400w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-1-800x422.png 800w\" sizes=\"(max-width: 851px) 100vw, 851px\" \/><\/p>\n<p><strong>Sectoral Contribution to the Equity and Corporate Bond Portfolio of the Linea Valori Responsabili\u2019s Scope 1 &amp; 2 Emission Exposure<\/strong><\/p>\n<h3>2. Weighted Average Carbon Intensity &#8211; WACI<\/h3>\n<p><strong>The Equity and Corporate bonds Portfolio\u2019s WACI is 290.66 tCO<sub>2<\/sub>e per one EUR million of revenue,<\/strong> higher than the benchmark.<\/p>\n<p>This is mainly due to higher exposure to Materials sector, among other carbon-intense sectors.<\/p>\n<p><img class=\"alignnone size-full wp-image-35376 lazyload\" data-src=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2.png\" alt=\"carbon footprint vr-2\" width=\"100%\" srcset=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2.png 1308w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2-300x49.png 300w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2-768x126.png 768w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2-1024x168.png 1024w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2-400x65.png 400w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-2-800x131.png 800w\" sizes=\"(max-width: 1308px) 100vw, 1308px\" \/><\/p>\n<p><strong>Sectoral Contributors to the WACI of the Equity and Corporate Bond Portfolio of the Linea Valori Responsabili<\/strong><\/p>\n<h3><strong>SUSTAINABLE DEVELOPMENT SCENARIO (SDS) ANALYSIS<\/strong><a href=\"#_ftn4\" name=\"_ftnref4\"><\/a><\/h3>\n<p><strong>The Portfolio is aligned with a Sustainable Development Scenario (SDS)<\/strong><a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a> <strong>until 2035 and is associated with a potential temperature increase of 2.1\u00b0C by 2050. The analysis shows a better performance than the benchmark which is not aligned with the SDS and exceeds the SDS -budget in 2024.<\/strong><\/p>\n<p>This is due to an expected increase of carbon emissions in carbon-intense sub-sectors such as Cement Manufacturers, where GHG emissions are expected to exceed emissions budgets after 2030. On the other hand, the positive sector allocation in sectors like Food Retailers &amp; Wholesalers positively impacts the Portfolio\u2019s predictions of staying within its carbon budget. <strong>The portfolio shows a high degree of climate targets, including relevant percentage of companies with approved Science-based Targets for emissions reduction.<\/strong><\/p>\n<p><img class=\"alignnone size-full wp-image-35379 lazyload\" data-src=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3.png\" alt=\"\" width=\"100%\" srcset=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3.png 975w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3-300x116.png 300w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3-768x297.png 768w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3-400x155.png 400w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-3-800x309.png 800w\" sizes=\"(max-width: 975px) 100vw, 975px\" \/><\/p>\n<p><strong>Equity and Corporate Bond Portfolio of the Linea Valori Responsabili<br \/>\nEmission Pathway vs. Climate Scenarios Budgets<\/strong><\/p>\n<h3><strong>TRANSITIONAL CLIMATE RISK &amp; CARBON RISK RATING<\/strong><\/h3>\n<p><strong>The Portfolio exposure to renewable power generation (53%) is considerably larger than the benchmark (16,05%), and it is already in line with the Sustainable Development Scenario (SDS) compatible energy mix for 2030. <\/strong><\/p>\n<p>In terms of Carbon Risk Rating \u2013 CRR, the weighted average CRR of the Equity and Corporate Bonds Portfolio of the Linea Valori Responsabili is 55, outperforming the benchmark (53). This shows that issuers invested in the Portfolio are better prepared for a transition to a low carbon economy, compared to benchmark constituents.<\/p>\n<hr>\n<h2>Sovereign Bonds portfolio of Linea Valori Responsabili<\/h2>\n<h2>CARBON FOOTPRINT ANALYSIS<\/h2>\n<h3>1. Relative Carbon Footprint<\/h3>\n<p>A total carbon footprint of 63,080 tCO\u2082e is attributed to the Sovereign Portfolio, that corresponds to a relative footprint of 29.4 tCO\u2082e\/Mil EUR invested, 8.4% below the benchmark. This ranking is reflected in the Relative Carbon Footprint based on investor\u2019s \u201cownership\u201d of the underlying countries\u2019 debts.<\/p>\n<h3>2. Weighted Average Carbon Intensity &#8211; WACI<\/h3>\n<p>The WACI metric highlights the Portfolio\u2019s exposure to carbon intensive countries. The WACI of the Portfolio amounts to 34 tCO2e per one EUR million of GDP, slightly more than the benchmark.<\/p>\n<p><img class=\"alignnone size-full wp-image-35382 lazyload\" data-src=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4.png\" alt=\"carbon footprint -vr-4\" width=\"975\" height=\"508\" srcset=\"https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4.png 975w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4-300x156.png 300w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4-768x400.png 768w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4-400x208.png 400w, https:\/\/www.eticasgr.com\/app\/uploads\/2021\/09\/carbo-footprint-vr-4-800x417.png 800w\" sizes=\"(max-width: 975px) 100vw, 975px\" \/><\/p>\n<p><strong>Emission intensity of the main constituents in the Sovereign bonds Portfolio of the Linea Valori Responsabili<\/strong><\/p>\n<p>&nbsp;<\/p>\n<hr>\n<p><sup><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> Launched after the 2015 Paris Agreement by the Financial Stability Board (FSB), the Task Force on Climate-related Financial Disclosure (TCFD &#8211; https:\/\/www.fsb-tcfd.org\/) considers climate transparency as a crucial factor for the stability of financial markets. The objective of the TCFD is therefore to improve climate transparency in financial markets through recommendations on disclosure. These recommendations provide a \u201cconsistent framework that improves the ease of both producing and using climate-related financial disclosures\u201d. The TCFD aims to create a unique standard for both corporate and investment disclosure, understanding that local regulatory frameworks may require different compliance levels.<\/sup><\/p>\n<p><sup><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> <a href=\"https:\/\/www.issgovernance.com\/esg\/\">https:\/\/www.issgovernance.com\/esg\/<\/a><\/sup><\/p>\n<p><sup><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> The metrics applicable to the Equity and Corporate bonds portfolio are scenario analysis, transitional climate risk &amp; carbon risk rating, and physical risk exposure. For sovereign bonds portfolios, beyond carbon footprint assessment, &nbsp;the risk-related metrics are referring to physical risk exposure of countries.<\/sup><\/p>\n<p><sup><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> The ISS ESG scenario analysis combines the three climate scenarios provided by the International Energy Agency (IEA) and the emission reduction methodology according to the Sectoral Decarbonization Approach (SDA)<sup>[4]<\/sup> developed by the Science Based Targets initiative (SBTi), which assumes that a company is responsible for its sector emission reduction pathway. The Sustainable Development Scenario -SDS alignment is based on a stricter assessment approach introduced by the IEA, which requires an alignment with a 1.5\u00b0C scenario, compared to previous year\u2019s alignment to 2\u00b0C scenario<\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This document is an extract of the Task Force on Climate-related Financial Disclosures (TCFD[1]) aligned Report released by the company ISS ESG[2] based on its proprietary methodology, in relation to the holdings of Etica Sgr\u2019s Linea Valori Responsabili Funds. All asset classes have been analyzed accordingly to the TCFD recommendations, grouped as follows: Equity Portfolio [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35953,"comment_status":"open","ping_status":"open","sticky":false,"template":"custom-templates\/single-avanzato.php","format":"standard","meta":{"footnotes":""},"categories":[590],"tags":[22640],"yst_prominent_words":[26318,22759,22750,26323,26322,26317,22755,22749,5746,612,22664,22670,22663,22660,26328,26319,22762,22756,18013,18017],"class_list":["post-35371","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","tag-carbon-footprint-report","temi-environment"],"_links":{"self":[{"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/posts\/35371"}],"collection":[{"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/comments?post=35371"}],"version-history":[{"count":7,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/posts\/35371\/revisions"}],"predecessor-version":[{"id":42160,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/posts\/35371\/revisions\/42160"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/media\/35953"}],"wp:attachment":[{"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/media?parent=35371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/categories?post=35371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/tags?post=35371"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.eticasgr.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=35371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}