Carbon Report. SEB Technology Fund. Report created on: Feb 25, 2019

Transcription

1 Carbon Report SEB Technology Fund Report created on: Feb 25, 2019 The carbon footprint provides a historic snapshot of the emissions from the equity holdings of the fund The calculations are not comprehensive and indirect emissions, eg from suppliers, are based on reported data or estimates of emissions The metric says nothing about how the portfolio contributes to a low-carbon society For further information about the metric, see wwwsebgroupcom

2 Contents Executive Summary Sector weighting and relative carbon footprint Relative Carbon Footprint Comparison Sector Analysis & Stock Selection Attribution Analysis Summary of 10 largest absolute contributors Summary of 10 largest portfolio companies Scope 3 Overview Company Sector & Breakdown Carbon Ranking

3 Carbon Report SEB Technology Fund Report created on: Feb 25, 2019 Holdings Date: Dec 31, 2018 : MSCI World Information Technology Net Return Index Currency: USD Industry Classification: GICS Company Breakdown Metrics: carbon intensity (tco2e / Mio revenue) Value: 32'530'00800 USD Fund Management Company: SEB Investment Management AB Executive Summary Carbon emissions Scope 1-2 Total carbon emissions incl Scope 3 Relative Carbon Footprint (kgco2e / USD 1'000 invested) Carbon Intensity (kgco2e / USD 1'000 revenue) Weighted Average Carbon Intensity (kgco2e / USD 1'000 revenue) Disclosing Titles by Weight (market value) ' % 979% % 969% Total carbon emissions - measure the carbon footprint of a portfolio considering Scope 1-2 as well as Scope 3 emissions *) - SEB Technology Fund is associated with greenhouse gas emissions of 4069 tons per year Relative carbon footprint - is a normalized measure of the portfolio's contribution - It enables comparisons with a benchmark between multiple portfolios, over time and regardless of portfolio size Carbon intensity - allows investors to measure how much carbon emissions per USD of revenue are generated - It therefore measures the carbon efficiency of a portfolio per unit of output This report analyses the portfolio of securities in terms of the carbon emissions and other carbon related characteristics of the underlying portfolio companies, and compares this data to the performance of a relevant respectively chosen market benchmark The portfolio s intensity is 05% higher than the benchmark 1200 The Sectors Information Technology, All other Sectors and (per GICS classification) in the portfolio make up 1000% of the weight vs 1000% of the contribution to emissions Sector Weight 21% Contribution to Information Technology All other Sectors 00 Carbon Intensity Carbon 979% 1000% 5 smallest contributors to the emissions of the fund are: emissions % of total Relative carbon footprint (kg CO2e / USD 1'000 Invested) Mastercard 02 00% 02 Apple 02 00% 01 Visa 02 01% 03 NVIDIA 03 01% 04 Intuit 03 01% 04 5 largest contributors to the emissions of the fund are: emissions % of total Relative carbon footprint (kg CO2e / USD 1'000 Invested) Konica % 853 STMicroelectronics % 653 Fujitsu % 597 Kyocera % 478 Murata % 400 *) Scope 1 emissions are directly generated by company's operations, whereas indirect Scope 2 emissions are related to the company's energy consumption Scope 3 emissions include other indirect emissions including eg business travel, use of company's products sold, investments, and goods and services purchased 3

4 Sector weighting and relative carbon footprint Weight Rel Carbon Footprint tco2e / Mio USD invested vs Information Technology 9791% 9629% % Relative Carbon Footprint Comparison Information Technology Sector Analysis & Stock Selection The graph below shows how the carbon allocation in the portfolio differs from the average of each sector Sectors have been defined using the GICS classification at the Supersector/Industry Group level 40% 30% 20% 10% 0% Application Software Communications Equipment Data Processing & Outsourced Services Electronic Components Electronic Equipment & Instruments Electronic Manufacturing Services IT Consulting & Other Services Semiconductor Equipment Semiconductors Systems Software Technology Hardware, Storage & Peripherals GICS Sub-Industry, Average GICS Sub-Industry 4

5 Attribution Analysis The two principal reasons why the carbon exposure of the portfolio may differ from the benchmark are due to sector allocation as well as stock selection decisions Sector allocation decision will cause the carbon intensity of the portfolio to diverge from the benchmark where the sectors are either carbon intensive or low carbon If the portfolio is overweight in carbon intensive sectors the portfolio is likely to be more carbon intensive than the benchmark However, if the stocks within a carbon intensive sector are the most carbon efficient companies, it is possible that the portfolio may still have a lower carbon footprint than the benchmark Sector Allocation Sector Selection Sector Allocation Contribution to Out/ Underperformance Sector Allocation Contribution to Out/ Underperformance (%) Stock Selection Contribution to Out/ Underperformance Stock Selection Contribution to Out/ Underperformance (%) Information Technology 17 07% % Others % % Total % % Explanation: The Underperformance of the portfolio is based on the effect of over/underweighting certain sectors and selecting more/less carbon intense stocks within each sector for each of the underlying holdings A positive number indicates that the effect increased the greenhouse gas emission (in tons of CO2e) and a negative number indicated a decreasing effect In this case, the sector weighting of SEB Technology Fund saved 08 tco2e, while the stock selection harmed 1450 tco2e versus the benchmark This explains a 03% outperformance through sector weighting and 559% carbon underperformance by stock picking Interaction Effect: 35 14% Total Carbon Underperformance 1477 Carbon Underperformance (%) 570 Attribution Analysis - Graph 60% 40% 20% 0% -20% Information Technology Others Sector Stock Total 5

6 Summary of 10 largest absolute contributors The tables below show the 10 largest greenhouse gas contributors and the 10 largest holdings respectively of the SEB Technology Fund Carbon Data section explains your, ie the amount of greenhouse gases that the portfolio finances from the company s overall emissions, relative to company ownership You can further see what % of the overall portfolio GHG emissions each company accounts for and if the company s GHG emission number was disclosed by the company or approximated In the Analysis section, the emissions are stated and the Average Sector allow a comparison of the greenhouse gas intensity of a company against its respective sector, ie the amount of GHG emissions that an investment of the same size would have financed, would it have been invested in the overall sector rather than the specific company The effect on the portfolio can be found under Contribution: This is a measurement of how much a specific holding raises or reduces the carbon footprint of the portfolio Company GICS Sub-Industry % of total Konica Technology Hardware, Storage & Peripherals Weight Carbon Data Analysis carbon intensity (tco2e / Mio revenue) Av Sector Contribution 21% 01% 148% STMicroelectronics Semiconductors 21% 02% 116% Fujitsu IT Consulting & Other Services 22% 02% 109% Kyocera Electronic Components 21% 03% 83% Murata Electronic Components 20% 05% 68% Infineon Technologies Semiconductors 21% 04% 51% Hewlett Packard Enterpris-WI Nokia (Helsingfors) Technology Hardware, Storage & Peripherals Communications Equipment 19% 04% 49% % 06% 42% Texas Instruments Semiconductors 21% 17% 42% Omron Electronic Components 19% 01% 34% Summary of 10 largest portfolio companies Company GICS Sub-Industry % of total Weight Carbon Data Analysis carbon intensity (tco2e / Mio revenue) Av Sector Contribution Microsoft Systems Software 59% 139% 01% Apple Fujitsu Technology Hardware, Storage & Peripherals IT Consulting & Other Services 59% 143% 00% % 02% 109% SalesforceCom Application Software 21% 18% 03% STMicroelectronics Semiconductors 21% 02% 116% Texas Instruments Semiconductors 21% 17% 42% Adobe Systems Application Software 21% 21% 01% Keysight Technologies Electronic Equipment & Instruments 21% 02% 26% Intel Corp Semiconductors 21% 41% 13% Dassault Systemes Application Software 21% 03% 01%

7 Scope 3 Overview The following section provides a top-down approximation of the financed scope 3 emissions from each sector The purpose of this analysis is to give an order of magnitude of the emissions in the portfolio on a sector level and should not be used as a basis for comparing two individual companies The methodology includes Scope 1, 2 and Scope 3 upstream and product use downstream The following graph shows the financed scope 1+2 emissions in relation to the scope 3 emissions of the portfolio 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Information Technology Scope 3 Scope 1&2 1' The graph below compares the total emissions (including Scope 1, Scope2 and Scope 3) between portfolio and benchmark Scope 3 Scope 1&2 1' *) The methodology includes Scope 1, 2 and Scope 3 upstream and product use downstream 7

8 Company Sector & Breakdown This table presents all holdings in the portfolio, sorted by sector, following the logic from the sections above It shows how each company contributes to the overall portfolio footprint It allows you to see which stocks are the greatest contributors to the portfolio s emission in absolute as well as relative terms The -/+ signs on the far right indicate if a specific holding raises or reduces the carbon footprint of the portfolio This helps with portfolio optimization and in managing the overall carbon portfolio footprint without comprising the chosen sector allocation Weight Carbon Data Analysis Company % of total carbon intensity (tco2e / Mio revenue) Av Sector Contribution IT Consulting & Other Services 101% 57% 153% Atos 21% 01% 08% Cap Gemini 19% 03% 13% Accenture 19% 17% 05% Fujitsu 22% 02% 109% Intl Business Machines Corp Com 20% 19% 19% Data Processing & Outsourced Services 121% 152% 19% Amadeus IT 21% 06% 02% Automatic Data Processing 20% 11% 04% Jack Henry & Associates 20% 02% 02% Mastercard 20% 33% 00% Visa 21% 44% 01% WESTERN UNION CO 20% 01% 10% Application Software 125% 106% 11% SAP 20% 18% 02% Dassault Systemes 21% 03% 01% Adobe Systems 21% 21% 01% Cadence Design Systems 21% 02% 03% Intuit 20% 09% 01% SalesforceCom 21% 18% 03% Systems Software 97% 186% 05% Microsoft 59% 139% 01% Oracle 21% 25% 03% VMware 18% 02% 01% Communications Equipment 20% 62% 42% Nokia (Helsingfors) 20% 06% 42% Technology Hardware, Storage & Peripherals 118% 174% 224% Konica 21% 01% 148% Apple 59% 143% 00% HP 19% 06% 27% Hewlett Packard Enterpris-WI 19% 04% 49% Electronic Equipment & Instruments 138% 25% 87% Ingenico 18% 01% 04% Shimadzu 19% 01% 11% Hitachi High-Technologies 19% 00% 14% Yokogawa Electric 20% 01% 28% Cognex 20% 01% 02% Keysight Technologies 21% 02% 26% Trimble Navigation 19% 02% 02% Electronic Components 78% 23% 187% Omron 19% 01% 34% Kyocera 21% 03% 83% Murata 20% 05% 68%

9 Weight Carbon Data Analysis Company % of total carbon intensity (tco2e / Mio revenue) Av Sector Contribution Yaskawa Electric 18% 01% 03% Electronic Manufacturing Services 20% 07% 31% TE Connectivity 20% 05% 31% Semiconductor Equipment 57% 30% 18% Tokyo Electron 18% 03% 09% ASML Holding 20% 12% 04% Applied Materials Inc 19% 06% 05% Semiconductors 103% 133% 223% Infineon Technologies 21% 04% 51% STMicroelectronics 21% 02% 116% Intel Corp 21% 41% 13% NVIDIA 18% 14% 01% Texas Instruments 21% 17% 42% Total portfolio 979% 969% 1000% Note that the weighting for the benchmark will not always total 100% as the stocks shown are only for those held by the portfolio 9

10 Carbon Ranking This is a standardized ranking of the fund based on the product's weighted average carbon intensity using two peergroups One consisting of all other funds in the database (global percentile) and one where the fund is ranked taking the specific Lipper Global Classification into account (peer percentile) The ranking is based on percentiles and ranges from 0 (worst) to 100 (best) Global Percentile 97 (n=5290) Peer Percentile 99 (Lipper Global Equity Global, n=935) The carbon footprint provides a historic snapshot of the emissions from the equity holdings of the fund The calculations are not comprehensive and indirect emissions, eg from suppliers, are based on reported data or estimates of emissions The metric says nothing about how the portfolio contributes to a low-carbon society For further information about the metric, see wwwsebgroupcom 10