A new report by data provider London Stock Exchange Group (LSEG) shows that aggregate emissions for key investment benchmarks are still rising – even if they are becoming less carbon-intensive per dollar invested.

Portfolio emissions measures are widely used for reporting and regulatory compliance, climate risk management, and portfolio construction. FY2024 disclosures show that all of the world’s top ten asset managers and half of the top ten pension funds now report on their portfolio emissions.

Portfolio carbon intensity has gradually declined since 2016, with the FY2023 weighted average carbon intensity (WACI) being 26 per cent lower in equities and 20 per cent in fixed income, but in absolute terms, emissions in global equity benchmarks have yet to peak, with emissions for the FTSE All World expanding at a 4 per cent CAGR in 2016-2023 to 13bn tonnes CO₂e.

Whilst 65 per cent of FTSE All-World constituents are now setting long-term climate targets, an eightfold increase since 2018, the pace of new commitments has slowed since 2021, and some doubts have been raised on their practicality (see article: Publicly-listed companies lack credible climate transition plans).

Now in its fourth edition, the Decarbonisation in Portfolio Benchmarks 2025 report, developed by LSEG researchers working with the Net Zero Asset Owners Alliance (NZAOA), tracks emissions trends for key portfolio benchmarks in global equities and fixed income using LSEG’s carbon data and indexes.

---