The State Street S&P Global Institutional Investor Carbon Indicator

Carbon has become an important factor for all investors, whatever their specific goals or views on climate change.

While decarbonization is discussed widely in the investment industry, there is not enough hard data to support it. To change that, we’ve partnered with S&P Trucost, powered by S&P Global Sustainable1 to create a measure that helps investors, the media, policymakers and the public at large understand how some of the world’s most influential investors are managing carbon risk.

Our Carbon Indicator combines trillions of dollars of aggregated and anonymized institutional investor positioning data from State Street with S&P Global’s carbon emissions data to create a unique tool that measures the degree large investors — like mutual funds, pensions and sovereign wealth funds — are decarbonizing their portfolios in aggregate.

State Street Institutional Investor Holdings and Risk Appetite Indicators

At its highest level, the indicator has two variants: emissions — tonnes of carbon emitted by portfolio companies, and intensity — calculated as tonnes of carbon divided by company revenue. While emissions captures the overall volume of carbon emitted, intensity measures how efficiently companies “use” carbon to generate revenues. Beneath these headline measures, we can break down movements in the Carbon Indicator into several components to better understand what is driving them.

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