Embodied CO2 emissions of equity portfolios for Chinese asset managers

Abstract

The 2015 Paris Agreement has set out the climate change target of limiting global warming to 1.5 °C, which poses a serious challenge to countries to reduce emissions. As the world’s largest carbon emitter, promoting the realization of the “dual-carbon” goal is the key to realizing China’s green transformation and high-quality development. Chinese asset managers play active roles in the capital market as an important channel of asset allocation. Currently, the vast majority of Chinese asset managers hold high percentages of high-carbon industries in their portfolios, and lack quantitative data of their carbon footprints embodied in equity investments, which faces huge carbon-related risks. Therefore, it’s an urgent need to comprehensively and scientifically measure financed emissions of Chinese asset managers, which is of great significance for asset managers’ carbon risk management and sustainable investment. This paper develops a detailed inventory of carbon emissions for equity portfolios managed by Chinese asset managers from 2010 to 2020, which stands as a pivotal reference for in-depth analysis of emission characteristics.