(Dow Jones) Northern Trust Corporation is offering its institutional and high-net-worth investment-management clients "environmental emission analytics"--that is, a tool to measure the "carbon footprint" of their investments.
As it happens, Northern is seeing an uptick in investors looking for measures of "environmental impact as an extension to established performance and risk analytics," according to Peter Holman, Northern Trust's head of institutional-investor service investors in Europe, the Middle East and Africa. The measures are sought either as a component of due diligence around "green" investing or to gauge the impact on a given investment should "cap and trade" or "baseline and credit" rules that seek to penalize those deemed to be polluters become widespread.
Combining data from Trucost--a London-based environmental data provider that claims the world's most comprehensive database on corporate "greenhouse" gas emissions--with Northern Trust's existing performance and analytics capabilities, environmental emission analytics help investors "compare the carbon footprints of their managers alongside more traditional risk metrics and style analyses," says Ian Castledine, head of investment-risk products for Northern Trust's asset-service business.
As a result, trustees will be able to "make comparisons between funds and individual managers, and improve communications on environmental performance with stakeholders and regulatory bodies" with the possible result of reducing the "environmental impact of their investments, without sacrificing financial performance," Castledine adds.
Chicago-based Northern Trust emphasizes that it doesn't vet Trucost's data, and offers its emission analytics "on an information-only basis for use as the client deems appropriate."
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