The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.

Contact us
Contact us

We’re happy to help, and there are various ways you can contact us.

If you have questions about your financial planning, retirement planning or long-term investing goals, speak to your financial adviser directly. Contact us .

Carbon reduction methodology

For the Sustainable Balance Fund and Responsible Choice Model Portfolios

Carbon reduction calculation

The methodology 7IM uses is recommended by the TCFD (Task Force on Climate-related Financial Disclosures) where the portfolio aggregated figure is calculated based on an equity ownership approach. For example, if an investor owns 2% of the company, then the investor also owns 2% of the company’s carbon emissions.

Carbon Formula

Adjusted coverage aggregation

Due to data issues in fixed income and problems with apportioning ownership to fixed income holdings, this method focuses on equity ownership. To allow a fair comparison against the global equity index, we use MSCI’s coverage adjusted approach to scale up equities’ carbon footprint in each portfolio.


The following steps summarise the calculation of the aggregate “Carbon Emissions – Scope 1 and 2 in metric tons” for a portfolio:

  1. We retrieve the following data points from our risk management system:
    • Weight (%)
    • Market Value
    • Market Capitalisation
    • Carbon Emissions – Scope 1 and 2 in metric tons
  1. Filter assets and adjust the weight based on coverage using the following steps

  2. Multiply coverage adjusted weights by total portfolio market value and obtain coverage adjusted market value for each asset in the portfolio

  3. Divide coverage adjusted market value of each asset by the market capitalisation of each asset and obtain investor allocation on each asset

  4. Multiply investor allocation of each asset in the portfolio by the carbon emissions of each asset and obtain ownership of carbon emissions in each asset. Finally, sum ownership weighted carbon emissions in each asset to calculate the total carbon emissions generated by investing XYZ (total portfolio market value) in the portfolio
Carbon Diagram
Holding typePortfolio weight %Portfolio market value £Issuer market cap £Carbon emissions in metric tonsCoverage adjusted weight %Coverage adjusted market value £ (3)Investor allocation % (4)Investor allocation of carbon emissions in metric tons (5)
Equity A1010,000,000500,000,000100,0002020,000,0004.04,000
Equity B1010,000,0001,250,000,000500,0002020,000,0001.68,000
Equity C1010,000,000750,000,00025,0002020,000,0002,7667
Equity D1010,000,000------
Equity E1010,000,000500,0005,000,0002020,000,0004.0200,000
Equity F1010,000,0002,500,000,0002,000,0002020,000,0000.816,000
Fixed Interest G1010,000,000------
Fixed Interest H1010,000,000------
Fixed Interest I1010,000,000------
Fixed Interest J1010,000,000------
Portfolio totals - Where applicable100100,000,000-----228,667


By following the methodology explained above we obtain the following figures for the Sustainable Balance Fund and the Responsible Choice Model Portfolios as at 5 May 2021:

7IM PortfolioEmissions adjusted per £1,000,000 invested
Sustainable Balance Fund23.27
Responsible Choice Cautious Model30.51
Responsible Choice Moderately Cautious Model30.80
Responsible Choice Balanced Model28.04
Responsible Choice Moderately Adventurous Model30.14
Responsible Choice Cautious Model Adventurous30.72
Contact us