Pax World Management, investment adviser to Pax World Funds, has completed a carbon benchmarking analysis of its five largest equity funds, the first phase in its effort to reduce the carbon intensity of all its portfolios over time.
Environmental data and analysis firm Trucost performed the carbon benchmark. Four of the five funds measured are already less carbon intensive than their benchmark indexes, and Pax World says it will set goals for further reducing their carbon footprint.
The investment firm is also taking steps to fully offset the carbon emissions of the Pax World Global Environmental Markets Fund, which is already a fossil fuel-free portfolio. Pax World says the fund will be the first fossil fuel-free and carbon neutral portfolio in the marketplace.
According to Trucost’s analysis, companies represented in the Pax World Global Environment Markets Fund generated carbon emissions totaling 13,102 metric tons. To offset these emissions and achieve carbon neutrality for the fund, Pax World is purchasing carbon offsets from projects that focus on the capture of methane gas emissions from landfills to produce electricity.
In addition to its carbon mitigation efforts, Pax World avoids investing in companies with primary businesses in coal mining and production of oil from tar sands. In addition, the firm says it seeks to avoid investments in any electric utility that relies on coal for power generation at levels above the national average, unless the utility demonstrates a significant commitment to renewable energy and is reducing its coal dependence.
Pax World also uses corporate shareholder engagement to urge companies to address climate-related risks and mitigate their emissions while supporting public policy advocacy initiatives to hasten a transition to renewable energy.
Earlier this month Pax World was one of 22 US investment firms with about $240 billion in assets under management to sign the Climate Declaration, calling upon federal policymakers to address climate change as an economic opportunity. Some 500 companies including Nike and General Motors have signed the Ceres-led initiative to date.
Pax World and three dozen other financial institutions also signed the Natural Capital Declaration at last summer’s Rio+20 Earth Summit. The NDC commits banks, investors and insurers to incorporating natural capital considerations into the risk assessment procedures they undergo before making a loan, equity, bond or insurance products-related decision.
This month, the NDC entered a new phase during which signatories will set about implementing the commitments.