Passed event: CFA Society Finland webinar: Carbon Data - Green Data or Greenwashing? 2.2.2021
Members & non-members event
date & time
02/02/2021 12.00 - 1.00 pm EET
Carbon emissions data is critically important to investors’ increasingly important role in helping combat climate change. Research by Vitali Kalesnik and his co-authors finds no evidence that forward-looking carbon scores or estimated carbon emissions provide sufficient data to be effective in promoting sustainable practices. Further, they find that the estimated data (often composing more than 50% of the data on carbon emissions!) lack accuracy and rely primarily on only industry and size information. Compared to reported data, estimated data lead to a significant loss of efficacy in investor actions on climate mitigation. This research debunks the belief that third-party estimated emissions are a satisfactory substitute for company-reported emissions and call for mandatory and audited carbon emissions disclosure. See the research paper here.
Key Points:
As investors strive to help mitigate climate change, they critically depend on carbon emissions data. Absent mandatory reporting, although roughly half of companies (47 to 62%) voluntarily report their carbon emissions, a substantial amount of emissions data are estimated by data providers. Research evaluates three types of carbon emissions data from four popular data providers: 1) current reported, 2) current estimated, and 3) forward-looking.
Research finds that the voluntarily reported data are the best in quality; the data on estimated emissions, while accurate, are at least 2.4 times less effective than reported data in identifying the worst emitters.
Research finds that estimated data reflect almost entirely only size and industry information, which makes estimated data ineffective in identifying green companies in brown sectors. This further reduces the efficacy of investor actions.
Further, the authors find no evidence that forward-looking carbon scores predict future changes in emissions.
Keynote speaker:
Vitali Kalesnik is a partner and senior member of the investment team at Research Affiliates. He leads research and business strategy in the European region. Previously, Vitali led the Equity Research team and continues to perform general equity-related research.
Articles he has co-authored with others have been recognized with three Graham and Dodd Scroll Awards, a Financial Analysts Journal Readers’ Choice Award, a William F. Sharpe Indexing Achievement Award, a Bernstein Fabozzi/Jacobs Levy Award, and a Graham and Dodd Top Award for "What Is Quality?" His research strengthens and expands Research Affiliates’ products—in particular, RAFI™ Fundamental Index™ strategies—and supports our global tactical asset allocation products.
Vitali earned his PhD in economics from the University of California, Los Angeles, where he was a winner of the UCLA Graduate Division Fellowship for 2001–2005. He speaks fluent English, Russian, and French.
The webinar will be joined also by Joe Steidl, CFA, FRM, Client Strategies, Senior Vice President at Research Affiliates. Joe Steidl is responsible for a number of key Research Affiliates’ partners in the European region, representing the firm’s various investment strategies, and also provides education around the firm's research and insights to institutional investors and consultants.