Swedbank Robur has long worked actively with the climate issue in all asset classes. However, established measurement methods have so far been lacking for, among other things, the carbon footprint of fixed income funds.
The fund company has now, under its own auspices, developed a first method for how to calculate and report the carbon footprint of covered bonds, which make up a very large part of the capital in traditional fixed income funds.
"We can't wait for everything to be in place but start working with what we do have if we are to drive the development forward. By developing this method and publishing our first estimates, we have taken yet another important step in being able to measure the carbon footprint of traditional fixed income funds. We see that an initial estimate is already feasible today, and it also gives us a good indication of how large the carbon footprint of this asset class is”, says Pia Gisgård, Head of Sustainability and Governance at Swedbank Robur.
Measurement of climate-related factors has so far been concentrated to equities and corporate bonds, where there have been established measurement methods for i.e., carbon footprint. Swedbank Robur's figures should be seen as a first estimate, but with, among other things, continued development of methodology from the issuers and better quality of the underlying data, the figures will continuously improve moving forward.
"In our dialogue work, the fixed income team has focused on encouraging issuers to increase transparency in their reporting, precisely to enable measurement in the long term. More recently, reporting has improved, and new methods have been developed, which now allow for first measurement. The method we have developed gives us a good foundation that we will continue to develop in the future as knowledge increases in the area and the availability of data becomes better and better”, says Karin Beltzér, Head of Fixed Income at Swedbank Robur.
Swedbank Robur’s method is based on industry standards for estimating carbon footprints across asset classes developed by the Partnership for Carbon Accounting Financials (PCAF).
About the Partnership for Carbon Accounting Financials (PCAF)
PCAF is an initiative that intends to enable issuers to calculate and report on carbon dioxide emissions linked to loans and investments. The methodology is based on calculations by the issuer itself, which should minimize the number of assumptions compared to if a data provider were to make the same calculations.