Carbon report SEB Japanfond

Transcription

1 Carbon report SEB Japanfond Report created on: February 27, 2018 The carbon footprint provides a historic snapshot of the emissions from the companies that make up the fund s equity portfolio. The calculations are not comprehensive and do not include indirect emissions. The metric says nothing about how the portfolio contributes to a low-carbon society. For further information about the metric, see

2 Contents Executive Summary 3 Sector weighthing and relative carbon footprint 4 Relative Carbon Footprint Comparison 4 Sector Analysis & Stock selection 4 Attribution Analysis 5 Summary of 10 largest absolute contributors 6 Summary of 10 largest portfolio companies 6 Scope 3 overview 7 Company sector & breakdown Carbon Barometer & Carbon Ranking Carbon Report - SEB Japanfond 2

3 Carbon Report SEB Japanfond Report created on: Feb 27, 2018 Holdings Date: Dec 31, 2017 : MSCI Japan (Net Return) Currency: SEK Industry Classification: GICS Company Breakdown Metrics: carbon intensity (tco2e / Mio. Value: 1'778'513' SEK Fund Management Company: SEB Investment Management AB Executive Summary Carbon emissions Scope 1-2 Total carbon emissions incl. Scope 3 Relative Carbon Footprint (kgco2e / SEK 1'000 invested) Carbon Intensity (kgco2e / SEK 1'000 Weighted Average Carbon Intensity (kgco2e / SEK 1'000 Disclosing Titles by Weight (market value) 35' ' % 100.0% 47' ' % 99.8% Total carbon emissions - measure the carbon footprint of a portfolio considering Scope 1-2 as well as Scope 3 emissions. *) - SEB Japanfond is associated with greenhouse gas emissions of 35'447.6 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 SEK 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 47.7% lower than the benchmark The Sectors Utilities, Industrials and Materials (per GICS classification) in the portfolio make up 28.4% of the weight vs. 75.8% of the contribution to emissions Carbon Intensity Carbon Sector Weight Contribution to 2.1% 19.7% 24.2% 39.3% 6.7% 17.9% 71.6% 18.6% Utilities Industrials Materials All other Sectors 5 smallest contributors to the emissions of the fund are: emissions % of total Relative carbon footprint (kg CO2e / SEK 1'000 Invested) Marubeni Corporation % 0.1 TKC % 0.6 DTS Corp % 0.1 Century Leasing System % 0.0 As One % largest contributors to the emissions of the fund are: Electric Power Development emissions % of total Relative carbon footprint (kg CO2e / SEK 1'000 Invested) 11' % 1'221.1 Japan Airlines 2' % 76.2 Mitsubishi Chemical 1' % JX Holdings 1' % Osaka Gas 1' % 62.9 *) 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 e.g. business travel, use of company's products sold, investments, and goods and services purchased. Carbon Report - SEB Japanfond 3

4 Sector weighting and relative carbon footprint Weight Rel. Carbon Footprint tco2e / Mio SEK invested vs. Utilities 2.12% 1.60% % Industrials 19.66% 21.48% % Materials 6.66% 6.66% % Consumer Discretionary 21.63% 20.17% % Information Technology 12.96% 12.74% % Energy 0.94% 1.10% % Consumer Staples 5.63% 7.62% % Telecommunication Services 6.77% 4.84% % Financials 16.72% 12.50% % Others 1.88% 4.14% % Health Care 5.03% 7.00% % Relative Carbon Footprint Comparison Utilities Industrials Materials Consumer Discretionary Information Technology Energy Consumer Staples Telecommunication Services Financials Others Health Care 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% Airlines Aluminum Building Products Commodity Chemicals Construction & Engineering Diversified Chemicals Electric Utilities Electronic Components Electronic Equipment & Instruments Food Distributors Food Retail Independent Power Producers & Energy Traders Steel Trading Companies & Distributors Trucking 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 (%) Energy % % Materials % % Industrials % % Consumer Discretionary % % Consumer Staples % % Health Care % % Financials % % Information Technology % % Telecommunication Services % % Utilities % % Others % % Total % % Explanation: The Outperformance 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 Japanfond harmed 18.3 tco2e, while the stock selection saved tco2e versus the benchmark. This explains a 0.6% underperformance through sector weighting and 6.6% carbon outperformance by stock picking. Interaction Effect: % Total 35' '820.0 Carbon Outperformance Carbon Outperformance (%) 7.2 Attribution Analysis - Graph 10% 0% -10% -20% Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunication Services Utilities 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 Japanfond. Carbon Data section explains your, i.e. 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, i.e. 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 Electric Power Development Independent Power Producers & Energy Traders Weight Carbon Data Analysis carbon intensity (tco2e / Mio. Av. Sector Contribution 0.5% 0.1% 31.5% ' ' ' ' Japan Airlines Airlines 2.1% 0.1% 8.1% ' ' ' Mitsubishi Chemical Diversified Chemicals 1.0% 0.4% 5.5% ' ' JX Holdings Oil & Gas Refining & Marketing 0.9% 0.6% 4.6% ' ' ' ' Osaka Gas Gas Utilities 1.3% 0.2% 4.2% ' ' ' Chubu Electric Power Electric Utilities 0.1% 0.2% 3.3% ' ' ' Nippon Electric Glass Electronic Components 1.0% 0.1% 3.2% ' Asahi Glass Building Products 0.5% 0.2% 2.8% ' Teijin Commodity Chemicals 1.1% 0.1% 2.3% ' Ube Diversified Chemicals 0.1% - 2.1% Summary of 10 largest portfolio companies Company GICS Sub-Industry % of total Toyota Motor Honda Motor Sumitomo Mitsui Financial Group Canon Hitachi Mitsubishi UFJ Financial Group Nippon Telegraph & Telephone KDDI Orix Mizuho Financial Group Automobile Manufacturers Automobile Manufacturers Weight Carbon Data Analysis carbon intensity (tco2e / Mio. Av. Sector Contribution 6.0% 4.6% 1.3% ' % 1.6% 1.8% Diversified Banks 3.6% 1.6% 0.1% ' Technology Hardware, Storage & Peripherals Electronic Equipment & Instruments 3.0% 1.1% 0.4% % 1.0% 1.6% Diversified Banks 3.0% 2.4% 0.0% ' Integrated Telecommunication Services Wireless Telecommunication Services Other Diversified Financial Services 2.9% 0.9% 1.0% % 1.2% 0.3% % 0.6% 0.3% Diversified Banks 2.4% 1.2% 0.1%

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. All emissions are in tco2e metrics. 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% Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials InformationTelecommunication Utilities Technology Services Scope 3 Scope 1&2 16'391 1'803 8'805 6'341 17'807 6'590 13'804 2'485 2' '989 2'336 1' '828 13'934 The graph below compares the total emissions (including Scope 1, Scope 2 and Scope 3) between portfolio and benchmark Scope 3 Scope 1&2 86'425 35'295 96'583 47'676 *) 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. Av. Sector Contribution Oil & Gas Refining & Marketing 0.9% 0.8% 5.1% ' ' ' ' Sinanen CO Ltd 0.1% - 0.5% JX Holdings 0.9% 0.6% 4.6% ' ' ' '346.8 Commodity Chemicals 4.5% 1.6% 8.2% ' ' ' ' Asahi Kasei 0.5% 0.5% 0.7% Adeka 0.7% - 0.5% Kuraray 0.6% 0.2% 1.3% Teijin 1.1% 0.1% 2.3% ' Denki Kagaku Kogyo K K 0.2% - 0.8% Mitsui Chemicals 0.4% 0.2% 2.0% Lintec Corp 0.9% - 0.6% Diversified Chemicals 1.1% 1.1% 7.5% ' ' ' ' Ube 0.1% - 2.1% Mitsubishi Chemical 1.0% 0.4% 5.5% ' '596.2 Specialty Chemicals 0.7% 2.0% 1.2% JSR 0.6% 0.1% 0.9% Nippon Shokubai 0.1% - 0.2% Paper Packaging 0.0% 0.0% 0.0% Rengo 0.0% - 0.0% Aluminum 0.2% 0.0% 0.4% Nippon Light Metal 0.2% - 0.4% Precious Metals & Minerals 0.1% 0.0% 0.0% Asahi Holdings 0.1% - 0.0% Steel 0.1% 1.1% 0.5% ' ' Topy Industries 0.1% - 0.5% ' Building Products 1.2% 1.5% 2.9% ' Asahi Glass 0.5% 0.2% 2.8% ' Sekisui Jushi 0.1% - 0.0% Takasago Thermal Engineering 0.6% - 0.1% Construction & Engineering 3.9% 1.0% 1.0% ' ' Kajima 0.3% 0.2% 0.1% Kyowa Exeo 1.1% - 0.0% Comsys Holdings 0.2% - 0.0% Sumitomo Densetsu 0.3% - 0.0% Taisei 0.4% 0.3% 0.1% Takamatsu Construction Group 0.1% - 0.0% Tokyu Construction 0.1% - 0.1% Nishimatsu Construction 0.7% - 0.3% Maeda Road Construction 0.5% - 0.5% Electrical Components & Equipment 0.3% 1.1% 0.1% Nitto Kogyo Corporation 0.3% - 0.1% Construction Machinery & Heavy Trucks 0.3% 1.1% 0.0% Kyokuto Kaihatsu Kogyo 0.3% - 0.0% Industrial Machinery 2.1% 4.3% 0.8%

9 Weight Carbon Data Analysis Company % of total carbon intensity (tco2e / Mio. Av. Sector Contribution Aida Engineering 0.9% - 0.2% Amada 0.4% 0.1% 0.0% JTEKT 0.8% 0.1% 0.6% Hisaka Works 0.0% - 0.0% Trading Companies & Distributors 5.5% 4.0% 1.3% ' ' ITOCHU 2.3% 0.8% 0.2% Kanematsu 0.8% - 0.2% Sumitomo Corporation 0.8% 0.6% 0.0% Sojitz Holdings 0.8% - 0.0% Marubeni Corporation 0.1% 0.3% 0.0% Mitsui & Co 0.2% 0.8% 0.0% Mitsubishi 0.5% 1.2% 0.8% Commercial Printing 1.2% 0.3% 0.8% Dai Nippon Printing 0.8% 0.2% 0.7% Toppan Forms 0.4% - 0.1% Airlines 2.1% 0.3% 8.1% ' ' ' Japan Airlines 2.1% 0.1% 8.1% ' ' '172.7 Trucking 3.1% 0.1% 3.5% ' ' Seino Transportation 0.4% - 0.9% Senko 1.3% - 0.7% Nippon Konpo Unyu Soko 1.5% - 1.9% Auto Parts & Equipment 3.0% 2.3% 1.0% Exedy Corporation 0.9% - 0.2% Ohashi Technica 0.1% - 0.0% SNT Corp 0.2% - 0.1% Denso 1.3% 0.8% 0.3% Toyoda Gosei 0.2% 0.0% 0.3% Press Kogyo Co 0.3% - 0.2% Tires & Rubber 1.1% 1.0% 0.8% Bridgestone 1.1% 0.8% 0.8% Automobile Manufacturers 11.0% 8.6% 3.9% 4.3 1' ' ' Toyota Motor 6.0% 4.6% 1.3% '746.9 Nissan Motor 1.4% 0.6% 0.7% Honda Motor 3.6% 1.6% 1.8% Homebuilding 2.6% 0.6% 0.2% Iida Group Holdings 0.5% 0.1% 0.0% Sekisui House 2.1% 0.3% 0.1% Leisure Products 0.6% 0.7% 0.2% Kawai Musical Instruments Manufacturing 0.0% - 0.0% Sankyo Co (6417) 0.2% 0.0% 0.0% Heiwa 0.4% - 0.2% Restaurants 0.2% 0.1% 0.1% Ohsho Food Service 0.2% - 0.1% Broadcasting 0.5% 0.0% 0.0% TV Asahi 0.3% - 0.0% WOWOW 0.1% - 0.0% Cable & Satellite 1.1% 0.0% 0.1% SKY Perfect JSAT 1.1% - 0.1% Distributors 0.2% 0.0% 0.0% Canon Marketing Japan 0.2% - 0.0% Apparel Retail 0.5% 0.7% 0.1% Aoyama Trading 0.5% - 0.1%

10 Weight Carbon Data Analysis Company % of total carbon intensity (tco2e / Mio. Av. Sector Contribution Computer & Electronics Retail 0.1% 0.2% 0.1% EDION Corp 0.1% - 0.1% Home Improvement Retail 0.7% 0.0% 0.6% Shimachu 0.7% - 0.6% Food Distributors 0.6% 0.0% 0.1% Kato Sangyo 0.6% - 0.1% Food Retail 2.1% 1.1% 0.1% Seven & I Holdings 1.4% 0.9% 0.1% Lawson 0.7% 0.1% 0.0% Hypermarkets & Super Centers 1.2% 0.3% 1.7% Aeon 1.2% 0.3% 1.7% Soft Drinks 0.0% 0.3% 0.0% Coca-Cola West Holdings 0.0% 0.1% 0.0% Packaged Foods & Meats 0.9% 1.5% 0.9% Nippon Flour Mills 0.3% - 0.2% J-Oil Mills 0.2% - 0.4% Mitsui Sugar 0.4% - 0.2% Tobacco 0.8% 1.0% 0.1% Japan Tobacco 0.8% 1.0% 0.1% Health Care Equipment 0.8% 1.1% 0.0% Paramount Bed Holdings 0.4% - 0.0% Fukuda Denshi 0.5% - 0.0% Health Care Distributors 1.1% 0.3% 0.1% Alfresa 1.0% 0.1% 0.1% As One 0.1% - 0.0% Health Care Services 1.1% 0.0% 0.1% Miraca Holdings 1.1% - 0.1% Pharmaceuticals 2.1% 4.8% 0.1% Kaken Pharmaceutical 0.3% - 0.0% Kyorin 0.4% - 0.0% Sawai Pharamceutical 0.1% - 0.0% Takeda Pharmaceutical 0.8% 1.1% 0.0% Daiichi Sankyo 0.2% 0.4% 0.0% Astellas Pharma 0.3% 0.7% 0.0% Diversified Banks 9.7% 5.9% 0.2% ' Mizuho Financial Group 2.4% 1.2% 0.1% Sumitomo Mitsui Financial Group 3.6% 1.6% 0.1% '295.9 Sumitomo Mitsui Trust 0.7% 0.4% 0.0% Mitsubishi UFJ Financial Group 3.0% 2.4% 0.0% '064.7 Regional Banks 0.8% 1.6% 0.0% Concoria Financial Group 0.1% 0.2% 0.0% Resona Holdings 0.6% 0.4% 0.0% Hiroshima Bank 0.1% - 0.0% Other Diversified Financial Services 2.6% 0.6% 0.3% Orix 2.6% 0.6% 0.3% Specialized Finance 0.7% 0.1% 0.0% Century Leasing System 0.4% - 0.0% Mitsubishi UFJ Lease & Finance Company 0.2% 0.1% 0.0% Consumer Finance 0.8% 0.2% 0.0% Hitachi Capital 0.8% - 0.0% Investment Banking & Brokerage 0.9% 0.9% 0.0% Daiwa Securities Group 0.6% 0.3% 0.0% Nomura Holdings 0.3% 0.6% 0.0%

11 Weight Carbon Data Analysis Company % of total carbon intensity (tco2e / Mio. Av. Sector Contribution Life & Health Insurance 0.9% 1.4% 0.0% Dai-Ichi Mutual Life Insurance 0.9% 0.6% 0.0% Property & Casualty Insurance 0.3% 1.7% 0.0% MS&AD; Insurance Group 0.3% 0.4% 0.0% IT Consulting & Other Services 1.5% 1.0% 0.1% DTS Corp 0.1% - 0.0% NEC Networks & System Integration 1.5% - 0.1% Data Processing & Outsourced Services 0.0% 0.0% 0.0% TKC 0.0% - 0.0% Application Software 0.4% 0.0% 0.0% NSD 0.4% - 0.0% Technology Hardware, Storage & Peripherals 4.8% 2.4% 1.2% ' Canon 3.0% 1.1% 0.4% Konica 0.6% 0.1% 0.3% Hitachi Maxell 0.2% - 0.1% Fuji Photo Film 1.1% 0.5% 0.4% Electronic Equipment & Instruments 3.4% 2.9% 1.6% Anritsu 0.0% - 0.0% Hitachi High-Technologies 0.3% 0.1% 0.0% Hitachi 3.0% 1.0% 1.6% Electronic Components 1.5% 2.7% 3.3% ' Arisawa Mfg 0.1% - 0.1% Canon Electronics 0.3% - 0.0% Dexerials 0.1% - 0.0% Nippon Electric Glass 1.0% 0.1% 3.2% ' Technology Distributors 0.5% 0.0% 0.0% Conexio 0.3% - 0.0% Ryoden 0.2% - 0.0% Semiconductor Equipment 0.3% 1.1% 0.0% Tokyo Electron 0.3% 0.8% 0.0% Semiconductors 0.5% 0.5% 0.4% Shinko Electric Industries 0.5% - 0.4% Integrated Telecommunication Services 2.9% 0.9% 1.0% Nippon Telegraph & Telephone 2.9% 0.9% 1.0% Wireless Telecommunication Services 3.9% 3.9% 0.4% ' NTT DoComo 1.1% 0.9% 0.1% Okinawa Cellular Telephone 0.0% - 0.0% KDDI 2.7% 1.2% 0.3% Electric Utilities 0.1% 1.0% 3.3% ' ' ' Chubu Electric Power 0.1% 0.2% 3.3% ' ' '126.1 Gas Utilities 1.5% 0.5% 4.6% ' ' ' Osaka Gas 1.3% 0.2% 4.2% ' ' '042.8 Tokyo Gas 0.2% 0.2% 0.3% Independent Power Producers & Energy Traders 0.5% 0.1% 31.5% ' ' ' ' Electric Power Development 0.5% 0.1% 31.5% ' ' ' '022.5 Others 1.9% 4.1% 0.4% LEOPALACE21 0.6% - 0.1% Jowa Holdings 0.4% - 0.2% Daiwa House Industry 0.5% 0.6% 0.0% Nomura Real Estate Holdings 0.4% 0.1% 0.1% Total portfolio 100.0% 99.8% 100.0% ' ' Note that the weighting for the benchmark will not always total 100% as the stocks shown are only for those held by the portfolio. 11

12 Carbon Ranking This is a standardized ranking of the fund based on the productís 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 71 (n=4380) Peer Percentile 41 (Lipper Global Equity Japan, n=121) The carbon footprint provides a historic snapshot of the emissions from the companies that make up the fund's equity portfolio. The calculations are not comprehensive and do not include indirect emissions. The metric says nothing about how the portfolio contributes a low-carbon society. For further information about the metric, see 12