Engaged Tracking is incentivising companies to reduce their carbon footprints by shifting investor capital towards low-carbon companies using a financial market mechanism.

Every year, Engaged Tracking produces a comprehensive and transparent public ranking of over 1,000 of the world’s largest listed companies according to the carbon intensity of their activities. The ranking position of each company in this index – the Low Carbon Index Series – then determines the weighting of investment the companies receive. This mechanism incentivises companies to reduce their emissions, and can protect investors from exposure to climate risk. Unlike other low-carbon indexes, Engaged Tracking’s rankings score companies according to their direct (Scope 1), indirect electricity (Scope 2) and indirect supply chain emissions (Scope 3). This gives a more holistic overview of the total emissions that companies are responsible for.

The rankings represent $39 trillion in market value, $20 trillion in sales, and five billion tonnes of CO2 in direct and indirect electricity emissions. This exceeds the combined emissions of the European Union.

To meet the SDGs, the World Economic Forum estimates that an annual US$ 5-7 trillion in sustainable investments is needed between now and 2030. Financial market mechanisms like the Low Carbon Index Series can act as levers for finance to drive decarbonisation, ensuring that new investments can influence the biggest companies who are responsible for the greatest emissions.