We’ll Always Have Paris: How Institutional Exposures to Carbon Emissions Have Evolved

Our analysis reveals the sources of noticeable decarbonization that has occurred in the investment sector since 2019.

November 2021

The Paris Agreement in 2015 marked a global milestone, where nations from across the world agreed to work together to tackle climate change. Responding to this changing landscape and taxonomy in climate change, investors are now increasingly paying attention to their portfolios’ carbon exposure. Nearly six years later, in 2021, we ask: where are we standing now? Have institutional investor portfolios achieved lower carbon exposures?

Our experts have developed a coherent framework to measure decarbonization within portfolios and decompose these changes in carbon exposure into distinct components mapping to company behavior, investor behavior and relative price effects. We discovered that each component matters in different contexts.