Stockpicking slashes emissions in EdenTree funds

EdenTree has slashed its carbon footprint in the Amity fund range up to 35 per cent over the last year, although its European fund has seen emissions from its portfolio increase over the period.

However, all funds in the Amity equity range are less carbon intense than their FTSE benchmarks with the UK fund in particular delivering 57 per cent less emissions than the All Share index.

Carbon footprints for the International, Global Equity Income and UK funds are down 35 per cent, 22 per cent and 16 per cent respectively compared to 2016, when EdenTree completed its first such analysis of its funds.

The Amity European fund carbon footprint increased 6 per cent over the year.

Annual public disclosure of portfolio emissions is a requirement of the Montreal Pledge, which EdenTree is a signatory of alongside Alliance Trust, Aviva Investors, Hermes and HSBC Global Asset Management among others.

EdenTree responsible investment analyst Esme Van Herwijnen says companies’ climate change disclosure has increased over the year that the fund house has been analysing the funds’ carbon footprints.

Asia lags in this regard and there is room for improvement across all markets, Van Herwijnen says, but where carbon disclosure is not available on holdings, EdenTree worked with research group South Pole to model any gaps.

“The carbon reduction is mainly due to stock selection by the fund managers and is a testimony that our screening process commends environmentally responsible companies into the funds,” Van Herwijnen says.

“The greatest progress was observed in the Amity International fund, where various high carbon stocks were sold during the year.”

The Amity International fund is 22 per cent less carbon intense than its benchmark, the FTSE All-World Index, while the Global Equity Income fund produces 26 per cent less emissions than the same index.

The Amity European fund, where emissions increased over the last year, remains 2 per cent less carbon intense than its benchmark.