So, if you’re looking at a Europe, US or World portfolio, and want to reduce carbon emissions, that reduction could come with a commensurate reduction in financial risk. From an investment perspective, therefore, this might actually make your choice more fiduciary.
Since carbon pricing is here to stay, and the price is very likely to increase in future, it poses a huge and underappreciated risk for companies, especially in the energy, materials, and utilities sectors. Climate indices such as the Paris-Aligned Benchmark (PAB) significantly reduce carbon emissions, and in doing so, could significantly reduce the carbon pricing risk embedded in holdings like this in your portfolios today.
Learn more about our Climate ETFs
*EBITDA refers to earnings before interest, taxes, depreciation and amortisation and is a common metric for evaluating a company’s operating performance.
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