Carbon footprint of the holdings of corporate bonds

The carbon footprint is a calculation of the greenhouse gas emissions that arise from, for example, a company’s operations. A common metric used when reporting the carbon footprint is carbon intensity, which shows a company’s emissions in relation to its revenue.

Here, we report the carbon footprint for the Riksbank’s holdings of corporate bonds. We weighted each company’s carbon intensity against its share of the corporate bonds in the Riksbank’s portfolio (the so-called ‘Weighted Average Carbon Intensity, WACI).

As of last March 2024, the weighted average carbon intensity was 88 tonnes of carbon per USD million of revenue (diagram 1).

Diagram 1. Weighted average carbon intensity, 2024-03-31

Figure: Weighted average carbon intensity

Note. The weighted average carbon intensity is reported in tonnes of carbon per USD million of revenue. This number is updated quarterly on the Riksbank’s website.
Source: ISS ESG and the Riksbank.

Diagram 2 illustrates the contribution of different sectors to the total carbon intensity in the Riksbank's portfolio as well as the sector distribution of the holdings. The diagram shows, for example, that the energy sector accounts for 31 percent of the contribution to the portfolio's carbon intensity, while the sector only accounts for 5 percent of the holdings.

The real estate sector instead contributes 21 percent to the portfolio-weighted carbon intensity, while this sector accounts for 58 percent of the total holdings.

Diagram 2. How much different industries contribute to the carbon footprint and their share of holdings

Figure: How much different industries contribute to the carbon footprint and their share of holdings

The carbon footprint is calculated based on both the companies' reported greenhouse gas emissions in 2022 and based on quantitative estimates of the emissions made by ISS ESG. Since calculations are partly based on estimates, the information on this page should be seen more as an indication of the carbon footprint of the Riksbank's corporate bond holdings than an exact calculation. From September 2022, the Riksbank only bought bonds from companies that report the carbon footprint according to Scope 1 and Scope 2, however this does not affect the bonds that the Riksbank has already acquired.

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Updated 03/04/2024