What a company’s Implied Temperature Rise can – and can’t – tell investors

By Trey Thoelcke Updated Jul 20, 10:33AM EDT · Published Jul 20, 4:32AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

What a company’s Implied Temperature Rise can – and can’t – tell investors — © billnoll / E+ via Getty Images

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — Climate data providers now report the temperature rise that is implied by a company’s greenhouse gas emissions.

This would appear to be a huge step forward, especially with heat records being broken almost daily around the globe. The temperature rise implied by each company’s operations would, finally, allow you to construct a portfolio that is consistent with the Paris Agreement’s objective of limiting global warming growth to 1.5°C. or 2.0°C.

I say “finally” because up until now the investment tools available to climate-focused investors have shed more heat than light. There is such wide disagreement between different ESG rating agencies that many just throw up their hands. Take the iShares ESG Aware MSCI USA ETF $ESGU , which is one of the largest ESG-focused exchange-traded funds; according to the iShares website, the ETF focuses on “U.S. companies that have positive environmental, social and governance characteristics.” One of this ETF’s biggest holdings is ExxonMobil $XOM .

Unfortunately, according to new research, the Implied Temperature Rise (ITR) data aren’t any more consistent than the ESG data…

Subscribe to Callaway Climate Insights to keep reading this post and get 7 days of free access to the full post archives.

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.