Corporate Carbon Emissions Data for Equity and Bond Portfolios

TD (Thijs) Markwat, Laurens Swinkels

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

Abstract

Purpose: To better understand the impact of choosing a carbon data provider for the estimated portfolio emissions across four asset classes. This is important, as prior literature has suggested that Environmental, Social and Governance scores across providers have low correlation. Design/methodology/approach: The authors compare carbon data from four data providers for developed and emerging equity markets and investment grade and high-yield corporate bond markets. Findings: Data on scope 1 and scope 2 is similar across the four data providers, but for scope 3 differences can be substantial. Carbon emissions data has become more consistent across providers over time. Research limitations/implications: The authors examine the impact of different carbon data providers at the asset class level. Portfolios that invest only in a subset of the asset class may be affected differently. Because “true” carbon emissions are not known, the authors cannot investigate which provider has the most accurate carbon data. Practical implications: The impact of choosing a carbon data provider is limited for scope 1 and scope 2 data for equity markets. Differences are larger for corporate bonds and scope 3 emissions. Originality/value: The authors compare carbon accounting metrics on scopes 1, 2 and 3 of corporate greenhouse gas emissions carbon data from multiple providers for developed and emerging equity and investment grade and high yield investment portfolios. Moreover, the authors show the impact of filling missing data points, which is especially relevant for corporate bond markets, where data coverage tends to be lower.

Original languageEnglish
Pages (from-to)118-139
Number of pages22
JournalManagerial Finance
Volume50
Issue number1
DOIs
Publication statusPublished - 4 Jan 2024

Bibliographical note

Publisher Copyright:
© 2023, Laurens Swinkels and Thijs Markwat.

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