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Bringing carbon footprinting to life

By Esmé Van Herwijnen, Responsible Investment Analyst
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For the second year running, EdenTree has comissioned carbon footprints of its equity funds in order to better understand the environmental impact and climate risks within our portfolios. Last week we published our full results, along with a blog taking a look at some encouraging of the highlights that came out of it. In this second part blog, we unpack the results a little further by looking at some of the highest emitting companies held in the funds, discussing why, despite a high carbon footprint, they are a good fit for inclusion in the Amity Funds. Emissions in the funds are concentrated among a small number of companies and understanding how those companies are addressing their impact is an important part of our work on climate change.


Enel is an Italian utility company with global operations. The company is the second largest emitter in the Amity European Fund and is responsible for 19% of all the emissions financed by the fund. As a utility company, transition risk is material. Climate change provides opportunities for companies and this is particularly relevant for utilities. If the company does not transition and provide an electricity mix that is relevant in a carbon constrained world, this will have an impact on its ongoing license to operate. Enel understands this very clearly and has already started to transition. Its generation mix has significantly improved since 2010, reducing the use of coal from 39% in 2010 to 28% in 2016. This is still a high amount; however the positive direction of travel is key. In addition, Enel is leading the utility sector regarding long term strategies. The company has set ambitious emission reduction targets with an aim to decarbonise by 2020. This makes the company’s strategy compliant with a 2°C scenario and in line with the goals of the Paris Agreement. Enel has been recognised by the CDP with the highest rating for transition opportunities among European Utilities.

Smurfit Kappa

Smurfit Kappa is an Irish-based paper/packaging business. The company commends itself well into the Amity Funds as a leader in sustainability and its commitment to the circular economy. Indeed 74% of raw materials used for its business are from recycled sources. Smurfit Kappa contributes significantly to the emissions of the Amity Global Equity Income Fund, where it is responsible for 5% of emissions financed. Paper production is an energy intensive process, hence the company’s high carbon emissions. However the company shows best practice in managing its impact. The company provides transparent disclosure on greenhouse gas emissions and it has already achieved a 22.6% reduction in emissions since 2005. The company also has a long term strategy and has set an overall target of 25% reduction by 2025 compared to 2005. The company is well on track to meet its targets and has implemented various initiatives to achieve this. For example the company has combined heat & power plants at several operation sites. The company also uses waste from its processes to create energy, shifting to CO2-friendlier fuels such as sawdust and sludge.


Veolia is a French utility company providing waste management as well as energy and water services. Veolia has a high carbon footprint and represents 32% of emissions in our Amity Global Equity Income Fund, however as a company, its whole business model is committed to mitigating the environmental impact of others. Where companies have high emissions we look at three different things: does the company provide transparent disclosure, is the trend going down and has the company set carbon reduction targets: Veolia already meets those three criteria. In addition as a waste management and water and energy services company we believe it provides significant environmental benefits and the company reports its own emissions are balanced out by the emissions it helps avoid. Veolia’s business also enables the circular economy through expanding the lifecycle of raw materials and generating new resources from waste. For example, the company turns biodegradable waste into fuel and generates electricity through cogeneration. In addition to saving carbon, Veolia contributes to increase the share of renewable power and reduce the amount of waste sent to landfill. We therefore feel it is a good fit for the fund.


The value of an investment can fall as well as rise as a result of market and currency fluctuations, you may not get back the amount originally invested. Past performance should not be seen as a guide to future performance. If you are unsure which investment is most suited to you, the advice of a qualified financial adviser should be sought. EdenTree Investment Management Limited (EdenTree) Reg. No. 2519319. Registered in England at Beaufort House, Brunswick Road, Gloucester, GL1 1JZ, UK. EdenTree is authorised and regulated by the Financial Conduct Authority and is a member of the Investment Association.