Nasdaq Helsinki Screening - Max Horster and Emma Henningsson_cdp

Climate Impact Screening of Nasdaq

Helsinki

Page 1

Dr. Maximilian Horster, Partner, South Pole GroupEmma Henningsson, Investor Team, CDP

South Pole Group and CDP · 4th November 2015

About South Pole GroupSouth Pole Group and CDP · 4th November 2015

We measure and reduce environmental

and social impact for 1’000+ clients.

We enable our customers to create value

from sustainability-related activities.

Our staff of 130 employees in 17 offices

worldwide are passionate to fight climate

change.

Page 2

Financial industry referenceSouth Pole Group and CDP · 4th November 2015 Page 3

A node for environmental information

CLIMATE CHANGE

FORESTS

WATER

Investors & Purchasing

organisations

Corporations

Authority

Information

Decision criteria

Authority

SUPPLY CHAIN

Page 4South Pole Group · CDP · 4 September 2015

Signatories & assets under management, 2003-15

Forests

159Reported in 2014

Water

1,064Reported in 2014

Climate change

5,000Reported in 2014

0

10

20

30

40

50

60

70

80

90

100

0

100

200

300

400

500

600

700

800

900

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Assets

(U

S$ T

rillio

n)

Nu

mb

er

of

Sig

nato

ries

Climate Change Signatories Water SignatoriesCarbon Action Signatories Forests SignatoriesClimate Change Signatory Assets Water Signatory AssetsCarbon Action Signatory Assets Forests Signatory Assets

Page 5South Pole Group · CDP · 4 September 2015

Climate Change embraced by investorsSouth Pole Group and CDP · 4th November 2015 Page 6

Global Investor

Statement on Climate

Change of 350 investors

Portfolio Decarbonization

Coalition is formed, with

now 10 members

Montreal Pledge is

announced. Over 100

signatories (USD 3tn+)

Mandatory investments

footprinting in France

Low Carbon Investment Registry

reports USD 24bn of emission

reducing investments by 45 investors

It´s a journeySouth Pole Group and CDP · 4th November 2015 Page 7

Climate Impact Analysis of the Nasdaq HelsinkiSouth Pole Group and CDP · 4th November 2015 Page 8

Task

South Pole Group and CDP · 4th November 2015 Page 9

Screen the 124 companies of the Nasdaq Helsinki for

their climate impact

Set the results in relation to investments into the

index

Compare the outcome against the OSEBX (Norway),

DAX (Germany), Eurostoxx 50 and MSCI World

Approach

South Pole Group and CDP · 4th November 2015 Page 10

Establish the carbon footprint of 1’275 companies

Relate results to each index investor’s «ownership»

of these companies to establish an «investment

carbon footprint»

Complement this with qualitative climate strategy data

of the underlying companies

Comparison Nasdaq Helsinki versus Benchmarks

South Pole Group and CDP · 4th November 2015 Page 11

EUR 1m invested into the Nasdaq Helsinki and the

Benchmarks.

Nasdaq Helsinki’s annual greenhouse gas

exposure yields «shadow costs» of 32 basis points.

When including indirect emissions, the intensity tripples…

South Pole Group and CDP · 4th November 2015 Page 12

…while all other indexes have a higher relative indirect emission intensity

South Pole Group and CDP · 4th November 2015 Page 13

EUR 1m invested into the Nasdaq Helsinki and

the Benchmarks.

Materials and Utilities companies are the largestcontributors

South Pole Group and CDP · 4th November 2015 Page 14

The 10 largest contributors account for 85% ofemissions..

South Pole Group and CDP · 4th November 2015 Page 15

…which is not linked to the top 10 companies byportfolio weight

South Pole Group and CDP · 4th November 2015 Page 16

34 % of companies report their greenhouse gas emissions

South Pole Group and CDP · 4th November 2015 Page 17

Not reporting is typically an indicator for lack of a

climate strategy.

Forward-looking vs. SnapshotSouth Pole Group and CDP · 4th November 2015 Page 18

Including trend indicators into the analysis

South Pole Group and CDP · 4th November 2015 Page 19

75% of capital invested in very transparent companies

South Pole Group and CDP · 4th November 2015 Page 20

Indicators of best practice in carbon management

South Pole Group and CDP · 4th November 2015 Page 21

82% 80% 80% 77% 76%

15%

Disclosure to CDP Board or seniormanagement

responsibility forclimate change

Climate changeintegrated into

business strategy

Have GHG target Emissionreduction

initiatives ongoingin the reporting

year

Emissionsdecreased in 2014

due to ERAs

% I

nve

ste

d c

ap

ita

l

Selected key indicators

Nasdaq Helsinki

Increasing maturity in action for carbon management

Nasdaq Helsinki stronger on leadership

South Pole Group and CDP · 4th November 2015 Page 22

Many companies achieve high scores on climate performance

South Pole Group and CDP · 4th November 2015 Page 23

Scope 3 emissions: taking steps to measure

South Pole Group and CDP · 4th November 2015 Page 24

Strong reporting on risks and opportunities

South Pole Group and CDP · 4th November 2015 Page 25

Free tool for screening your own Finlandportfolio

South Pole Group and CDP · 4th November 2015 Page 26

www.sitra.fi/sites/default/files/u489/20151030_final_nasdaq_omx_helsinki_tool.xlsm

Strategies to act

Measure & set targets Set reduction targets for yourself & asset

managers

Communicate Report your climate impact to stakeholders

Engage Engage on Transparency and Performance

Hedge Focus on likely winners of low carbon economy

Price externalities Apply environmental cost, offset GHG emissions

Divest Avoid fossil fuel exposure entirely

Page 27South Pole Group and CDP · 4th November 2015

CLIMPAX – a game changer for retail investors

South Pole Group and CDP · 4th November 2015 Page 28

University of

Hamburg

South Pole Group and CDP · 4th November 2015 Page 29

What´s next?

Thank youSouth Pole Group and CDP · 4th November 2015 Page 30

Dr Maximilian Horster

[email protected]

Emma Henningsson

[email protected]