Funds' carbon footprint

They don't produce much in the way of greenhouse gases themselves, but mutual funds and exchange traded funds can leave an indirect carbon footprint.
APR 12, 2009
They don't produce much in the way of greenhouse gases themselves, but mutual funds and exchange traded funds can leave an indirect carbon footprint. Trucost PLC, a London-based environmental-research organization, recently calculated that the companies held by 91 surveyed funds are associated with producing more than 615 million metric tons of carbon dioxide globally, according to a report released last week, That total is the equivalent of 8.6% of U.S. greenhouse gas emissions of almost 7.13 billion metric tons in 2007. So which funds were the carbon winners and losers? The Financial Select Sector SPDR ETF (XLF) had the smallest footprint, followed by the Vanguard Health Care Fund (VGHCX), PowerShares QQQ Trust (QQQQ), Ariel Appreciation Fund (CAAPX) and Oppenheimer Global Fund (OPPAX). The iShares FTSE/Xinhua China 25 Index ETF (FXI), had the largest footprint, followed by the Fidelity Capital Appreciation Fund (FDCAX), Janus Fund (JANSX), Sentinel Sustainable Core Opportunities Fund (MYPVX) and Energy Select Sector SPDR ETF (XLE). By identifying funds' carbon footprints, Trucost hopes that investors will see the environmental cost of their decisions and take action, making socially conscious investing mainstream, said Simon Thomas, the group's chief executive. "Funds need to be moving capital away from carbon-inefficient companies," he said. Apart from their environmental impact, carbon-inefficient companies are likely to have poor relative performance as governments move to reduce carbon output, he said.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.