The Riksbank rejects issuers with a large climate footprint I believe it is better to instead focus on the issuers, and to make an overall assessment of how they work to promote a sustainable climate. Indicators of this could be, for instance, their greenhouse gas emissions. This is how we are now beginning to give consideration to sustainability in our new risk and investment policy. We will not invest in assets issued by issuers with a large climate footprint when we are choosing other assets than those best corresponding to our policy need. This has some consequences for the holdings in our foreign exchange reserves. The Riksbank has invested around 8 per cent of the foreign exchange reserves in Australian and Canadian central and federal government bonds, as they give relatively high yield and a good diversification of risk, at the same time as being traded on liquid markets. But Australia and Canada are countries that are not known for good climate work. Greenhouse gas emissions per capita are among the highest in the world, but vary considerably between the different states. For instance, greenhouse gas intensity is more than three times higher in production in Alberta than in Ontario and Quebec. As a result of the new investment policy, we sold our holdings of bonds issued by Alberta in the spring. For the same reason, we have recently sold our holdings in bonds issued by the Australian states of Queensland and Western Australia.
As a first step, we will disclose the Weighted Average Carbon Intensity (WACI) of our equities portfolio relative to market benchmarks. Carbon intensity measures the carbon emissions per unit of revenue of the company. The WACI is derived from the carbon intensity of revenues of each of the companies in the portfolio, weighted by the relative size of the investments in those companies. MAS’ equities portfolio has a lower carbon intensity than its market benchmarks. As at end-March 2021, the WACI for MAS’ Emerging Markets equities portfolio was 30% lower than its benchmark while the WACI for MAS’ Developed Markets equities portfolio was 3% lower than benchmark. We will continue to monitor MAS’ portfolio WACI over time and seek to understand the impact of our portfolio actions on WACI levels. A SUSTAINABLE ORGANISATION Finally, as a corporate citizen, MAS is accountable for reducing and reporting its own carbon footprint. We aim to build a sustainable organisation and have advanced on two fronts: measuring our carbon footprint; and developing strategies to reduce our footprint. MAS has substantially established its carbon profile across Scope 1, Scope 2 and Scope 3 emissions. Scope 1 emissions, namely from sources controlled or owned by MAS, are negligible. Scope 2 emissions, namely from purchased electricity to power our office premises, have been on a downward trend. Scope 3 emissions, namely from corporate activities such as air travel, currency operations, and waste incineration, account for most of our carbon profile.