This new enhancement comes at a time of heightened awareness of the effects of carbon emissions on the environment, particularly as governments worldwide implement taxes and regulation on emissions. The development of environmental emission analytics is in line with Northern Trust’s commitment to supporting responsible investment policies through asset management and asset servicing solutions.
“Increasingly, we are seeing investors turn their attention towards measures that attempt to accurately attribute environmental impact as an extension to established performance and risk analytics,” said Peter Holman, head of client servicing for institutional investors in EMEA, at Northern Trust. “But the ability to accurately assess the carbon footprint of a portfolio is largely constrained by the lack of consistent or comprehensive environmental data disclosed by companies.”
Northern Trust provides clients with environmental analytics based on data from Trucost Plc, through the Style Research Portfolio Analyzer (SRPA). Trucost which was established to help organizations, investors and governments understand the environmental impact of business activities in financial terms, claims to hold the world’s most comprehensive database on corporate greenhouse gas emissions.
“By combining the analytics received through Trucost’s methodology with Northern Trust’s existing performance and analytics capabilities, we provide consolidated information to clients, enabling them to compare the carbon footprints of their managers alongside more traditional risk metrics and style analyses,” said Ian Castledine, global head of investment risk product for asset servicing at Northern Trust. “Using our integrated environmental analytics solution, trustees can make comparisons between funds and individual managers, and improve communications on environmental performance with stakeholders and regulatory bodies. This may ultimately result in a reduced environmental impact of their investments, without sacrificing financial performance.”
The new capability is an innovation of Northern Trust’s Investment Risk and Analytical Services, which has provided risk and performance services to clients for more than 30 years. Recent developments include enhanced data for comprehensive Environmental, Social and Governance monitoring of client portfolios with its Compliance Analyst product. A recent member of the United Nations Principles for Responsible Investment (UN PRI) and member of the Institutional Investors Group on Climate Change (IIGCC), Northern Trust also has more than $9 billion in socially screened assets under management, including index options such as the Northern Global Sustainability Index Fund.
Northern Trust does not review/approve the contents/conclusions provided by Trucost and offers this on an information only basis for use as the client deems appropriate.
