The greenhouse effect is the process in which certain particles (those we call greenhouse gasses) absorb heat reflected from the earth’s surface and keep it circulating below the atmosphere. Humans have both increased the production of greenhouse gasses and reduced the capacity of the environment to absorb them. Most industries contribute to greenhouse gas emissions, particularly energy/heat generation, agriculture, and transportation, but there is high variance in carbon emissions performance within each industry, including both leaders and laggards.
OpenInvest partners with ET Index, a leading data analyst and provider in the space. “Scope 1, 2, and 3” emissions data (direct emissions, indirect emissions, and those “purchased” for heat, energy or steam) is collected for companies across all industries where available. The company is subsequently ranked against its sector peers. When a company fails to disclose its Scope 1 and 2 emissions, it is assumed that it performs worst in class. Scope 3 emissions are complex, and calculating them is a relatively new field. A variety of public filings and sector-based assumptions and calculations are deployed. If you select this screen, OpenInvest invests you in the leaders (lowest carbon emissions) and divests you from the laggards (highest emissions).