SBAI Publishes Carbon Accounting Guidance for Direct Commodity Investments
The Standards Board for Alternative Investments (SBAI) has published a new report on the responsible investment and GHG-emission considerations in direct commodity investments. This guidance addresses the gap in dialogue for investors with direct commodity exposure, including the question of how, and whether, to account for commodities for GHG-emission portfolio accounting purposes.
The SBAI does not recommend inclusion of commodity derivatives for GHG-emission accounting purposes, despite the arguable role of facilitation in these markets. The report further explores other mechanisms for impact and engagement, including with derivative exchanges, so that investors seeking to engage on these matters can do so.
Jane Buchan, Chief Executive Officer at Martlet Asset Management and Chair at the SBAI, said: “Responsible investment remains a key element of sound risk management for many investors. Our guidance aims to enhance understanding of how investors can drive, measure, and think about both risk and impact.”
Despina Xanthopoulou, Director, Business Development and Sustainability at Lynx Asset Management, said: “As an active participant in the derivatives market, Lynx has worked together with exchanges and other stakeholders to strive to make meaningful impact in the commodity contracts that our strategies trade.”
Laura Song, Principal, Sustainable Investing and Innovation at OPTrust, said: “As long-term investors, we recognise the importance of prudent incorporation of risks surrounding sustainable investment in commodities. The SBAI’s guidance outlines these key risks, and highlights valuable engagement channels, such as exchange initiatives, which are important for investor education.”
The SBAI is an active alliance of over 250 alternative asset managers and institutional investors dedicated to advancing responsible practice, partnership, and knowledge. It advocates for an effective alternative investment ecosystem through robust standards and the exchange of ideas. For more information on the SBAI or to join the SBAI community, please contact [email protected] or visit www.sbai.org.
