2016 saw the launch of the SEI Metrics Projects, which provides a free and open-source portfolio test for listed equity portfolios. Over 200 institutional investors around the world have signed up to test their portfolios, including large asset managers, pension funds, insurance companies, banks, and sovereign wealth funds. Since its launch, over 2,000 portfolios have been tested for 2°C alignment with over $3 trillion in assets under management.
The model involves a comparison of key sectoral and technology trends across the energy, power, and transport sectors, with an extension to industry in 2017. It compares the exposure of a given portfolio to both current and planned capacity, production, and investment plans to 2°C scenarios, mapped to specific asset classes and geographies (see excerpt chart from briefing below) – with geography and stock market specific calculation outputs. More information on the model as well as the publications can be found here. The model development was funded by the EC H2020 program as part of the Sustainable Energy Investing Metrics project.
Of the 25% of surveyed investors involved in the road-test, 88% said they were likely or very likely to use the assessment in portfolio management, engagement, and / or investment mandate design. In 2017, the model will be expanded to corporate bonds and credit, as well as a broader range of sectors.
All publications from the SEI Metrics project can be found here.