ESG: responsible investing & valuation

    Weighted average carbon intensity (WACI)

    Formula

    Weighted average carbon intensity (WACI)

    WACI = Sum over all holdings of (Portfolio weight × (Scope 1 emissions + Scope 2 emissions) ÷ Revenue)

    Variables

    Portfolio weightValue of the holding ÷ total value of the portfolio
    Scope 1 and Scope 2 emissionsThe company's emissions for the year, in tCO2e
    RevenueThe company's revenue for the same year and boundary, in ₹ crore

    Finding the inputs

    Holdings and weights come from the fund's monthly portfolio statement. Each company's Scope 1 and 2 emissions are in its BRSR (Principle 6, a BRSR Core indicator), and revenue is in its statement of profit and loss. Use the same boundary (standalone or consolidated) for emissions and revenue.

    Reading the number

    The result is in tCO2e per ₹ crore of revenue. A lower WACI means the portfolio leans towards less carbon-intensive businesses. It is useful for comparing a fund with its benchmark, but it measures exposure, not emissions owned, and it can fall simply because the manager sold high emitters. Revenue intensity also favours high-price, high-margin companies, so compare within sectors where possible.

    Illustrative example

    Glossary terms

    From the research

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