Carbon Accounting for Complex Portfolios
Large, diversified institutional portfolios face a carbon accounting problem that off-the-shelf methodologies don't fully address: emissions data that's inconsistent across asset classes, incomplete for private holdings, and difficult to compare across managers.
Oregon State Treasury has contracted with Oakledge Advisors to convene a technical working group of institutional allocators to work through these issues collaboratively. The goal is to produce allocator driven, globally applicable emissions accounting guidelines across key asset classes and investment instruments not addressed by current emissions accounting standards. We intend that these efforts will lead to more consistent, comprehensive, comparable, and decision useful GHG emissions data across the kinds of complex, multi-asset-class portfolios that standard reporting frameworks tend to handle poorly.
What the group will work on?
Identifying where current carbon accounting approaches break down for large complex portfolios, and developing practical, shared solutions – not another parallel standard, but ways to make existing data more usable and comparable across institutions.
What is in scope for this analysis?
Part of our initial scoping work involves soliciting input from the allocator community regarding what are portfolio exposures that they are not able to adequately account for at present. To date, we have identified the following but intend to amend the list as we gather more feedback: short positions, securities lending, derivatives, sovereign debt, cash and short duration assets, private equity (including venture capital), securitized assets.
Who can participate?
Participation is limited to asset allocators, including pension funds, sovereign wealth funds, insurance companies, endowments, foundations, and similar asset owners with diversified portfolios. This is a deliberate starting scope, not a permanent one; other participant categories may be considered as the group's work develops.
What participation involves?
Participants will be expected to identify and provide commentary on the most material and commonly shared gaps, inconsistencies, and methodological issues in their current climate-accounting practices across relevant asset classes and investment structures. Participants will also be expected to support Oakledge’s role as the Secretariat for this effort, in particular reviewing guideline drafts prior to publication, and optionally serving as spokespersons for this initiative, as appropriate.