Carbon emissions and data centers - American Century Investments ®

Case study: understanding carbon emissions and the IT sector

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... While it is useful to analyze a portfolio’s exposure to a specific environmental, social and governance ( ESG ) risk or opportunity as measured by the U.N. Sustainable Development Goals (e.g. No. 7, Affordable and Clean Energy or No. 13, Climate Action), investors may underestimate risks if they fail to drill down to the sector and stock levels. In this paper, American Century Investments ® discuss carbon emissions exposure at the sector and industry levels by considering electricity usage by data centers, a large and growing segment of the information technology (IT) sector. They also present two case studies that illustrate how they assess whether sector ESG risks could translate into risks (or opportunities) for a company’s financial condition.

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