Asset managers Mirova and Robeco have partnered to develop a global database of ‘avoided emissions’ – emissions that are avoided by product innovations and which contribute positively to carbon reduction.
The partnership will work with 11 other financial firms, including abrdn and Axa Investment Managers, to launch a call for expressions of interest to create a globally accessible common database of avoidance factors.
The database will also provide an estimation of emissions avoided by companies over a wide investment universe of listed companies.
Many companies now report their Scope 1 emissions and an increasing amount of data is published about estimated indirect emissions, such as Scope 2 and Scope 3.
However, the partnership has identified metrics required to determine avoided emissions – sometimes called Scope 4 emissions – which reflect a company’s contribution to the global net zero objective through emissions reductions. This should give a clearer picture of a company’s overall emissions, allowing for better comparison and decision making when allocating capital.
Manuel Coeslier, lead expert of climate and environment at Mirova, said: “Clear and comprehensive information on companies’ true contribution to the global net zero objective is essential. This includes a robust measurement of avoided emissions.”
Avoided emissions are currently calculated in a variety of ways by different companies, which jeopardises their credibility and prevents their use at scale.
This issue was previously recognised by the G7, which called for the private sector to work together to develop an international standard. Therefore, the database will ensure the methodology for calculations of avoidance factors is transparent and standardised to provide easy access.
Lucian Peppelenbos, climate and biodiversity strategist at Robeco, said: “Transparency and a common methodology are essential, and we hope this initiative may contribute to establishing this.”
The creation of a new database of avoidance factors is Robeco’s latest venture to improve ESG and sustainability data practices. The asset manager previously opened its Sustainable Investing Open Access Initiative to provide access to the SDG scores of companies Robeco has generated using its SDG framework.
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