Investment Institute

Is there a premium for low-carbon-intensity European equities?

  • 25 May 2023 (5 min read)

Key points

  • 2022 was only the third year in 12 when a key ESG leaders index has underperformed the broader market
  • From a pure carbon intensity perspective, the best performing companies appear to outperform their European peers over the longer term
  • The most carbon-efficient companies may offer greater diversification relative to ESG indices and European benchmarks to a larger extent
  • The best-performing low-carbon intensity companies appear to less impacted by the real rates regime compared to growth stocks
  • A carbon efficiency strategy may offer an interesting complement for stock pickers
Is there a premium for low-carbon-intensity European equities?
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