Welcome to EDHEC-Risk Institute. Today we are going to talk about sector biases in carbon footprint measures. We are going to discuss how some sectors have a much bigger carbon emission level compared to other sectors as expected. Now, we are going to use a database of carbon intensity measures. This database is distinguishing as always between scope 1, scope 2, and scope 3 carbon emission measures, so increasing scope in terms of how we account for the carbon impact of a given company. We are going to focus on the normalized quantities which appear here in this table in Italic. The normalized quantities are such that we divide carbon emissions by the revenues of the film, and this is what we call the carbon intensity measures. The analysis of the table that we are going to look at is obtained from a paper from colleagues of ours at Stanford University who have studied the impact of low carbon filters on the performance of an equity portfolio. In particular, this table, look at the carbon intensity measure for different sectors of the S and P 500 index. Now, clearly, for simplicity, I'm going to focus on the global measure which aggregates scope 1, 2, and, 3. This is the last column on the right of the table. Clearly what we see is that they are three sectors that stand out in terms of their carbon intensity measure, energy, materials, and utilities. Those sectors, when it comes to carbon emission divided by revenues, well, they are just much higher than the other sectors. If you look at financial, for example, the carbon intensity looks very small compared to say, energy or materials, or utilities. Now, it's interesting to look at within these sectors in particular, what is the contribution of scope 1, scope 2, or scope 3 to these massive carbon emission or carbon intensity measures. Well, if you look at utilities, for example, what you see is the vast majority of carbon intensity for these utility comes from scope 1, so we're talking about direct emission. To some extent it's also true for energy, even though for energy, the contribution of scope 2 and scope 3 is much higher. Now, by comparison, if you look at what happens for financial, for example, of a technology firm, well, within their carbon intensity measure clearly, the biggest component is not the direct emission. After all, investment banking or banking activities do not generate a lot of carbon emissions. But the majority of the impact come from scope 3, whereby we take into account the whole value chain, including upstream, downstream, the suppliers, and also the clients of those products and services. Now, interestingly, there is some encouraging evidence of relatively small but noticeable decrease in carbon intensity in the West. If we look over time between 2005 and 2015, regardless of which measure that we are looking at, whether we're looking at the row emission numbers, or whether we are looking at the emission numbers normalized by the revenues of the firms. In other words, whether we look at row emissions or whether we look at intensity, all of these numbers seems to be decreasing somewhat over time.