ERAFP updates the carbon footprint measurement of its portfolio of shares in major publicly traded companies and joins the Portfolio Decarbonization Coalition

Paris, 27 May 2015 – Following up on its signature of the Montreal Pledge in 2014 and the commitment made with three other French institutional investors (see the press release of 21 May), ERAFP updated the measurement of the carbon footprint of its stock portfolio as of 31 December 2014. This portfolio emits on average 16% fewer TEQs of CO2/€ millions of revenue than its reference index, MSCI World. Its excellent performance is primarily due to the best-in-class approach applied within each sector.

Conducted for the listed shares in major companies held by ERAFP at 31 December 2014, the study consolidates greenhouse gas emissions (GHG) data for each company to calculate the carbon intensity of the portfolio and to compare it with that of a relevant market index. ERAFP contracted with Trucost to perform this service, which used the data made available by the companies on their direct (scope 1) and indirect (scope 2 and direct suppliers) GHG emissions.

At the end of 2014, the ERAFP's stock portfolio had a carbon intensity that was 16% lower than its reference index, MSCI World, a slightly smaller gap than in 2013 (19%). This is due to changes in the geographic allocation of the various categories of the portfolio (eurozone stocks, international stocks, etc.). Among other things, the 2014 launch of contracts for North American stocks, which offer a structurally less satisfactory performance in this area, had a negative impact.

However, the contribution of “selection of securities” compared with that of “sector allocation” to the good performance of the ERAFP's portfolio in terms of carbon intensity has increased: it measured 64% in 2013, and now registers 76%. The positive effect of selecting securities from companies with lower than average carbon emissions illustrates the impact of ERAFP's best-in-class strategy. This is especially apparent for the European stock portfolio, which reflects in particular the work conducted with Amundi to achieve a 40% reduction of the carbon footprint of one of the funds in this category, without excluding any sector.

ERAFP is committed to continuing to reflect on how its investment policy can contribute to the decarbonization of the economy. It is with this purpose that ERAFP has joined the Portfolio Decarbonization Coalition, an initiative sponsored among others by UNEP and the Carbon Disclosure Project.