Quantifying the climatic impacts and risks of investments

With no way to assess the impact and risk of individual investments on the climate, investors are currently unable to make choices based on this important factor. The Greenhouse Gas Data for Investment Decisions (Sgreenvest) project is generating, quantifying and analysing the data to be used in potential products and tools that will give investors the knowledge that they need to make informed decisions.

The climate change issue

Investors currently have no way of knowing the impacts and risk on the climate that prospective investments could have. By making information on the carbon materiality of investments available, investors will be more likely to allocate funds to climate-friendly opportunities. But in order to promote a new investment culture, comprehensive knowledge is needed on the climatic impact of investments. This information needs to be made readily available and easy-to-use across marketable products and tools.

The project solution

The Sgreenvest pathfinder project is focused on generating and ensuring the reliability of carbon data. After quantifying and analysing company carbon data, a manual checking process will deliver the necessary scientific thoroughness to deliver quality results. The second stage of the project then assesses the different potential product and usage ideas based on the data. This includes exploring the potential for a carbon/media fund, a carbon adjusted company evaluation tool, and a carbon data feed into investment screeners. Through cooperation with industry practitioners, these concepts will be further assessed for their feasibility and practical use. Desired outcomes include – among others – innovative assessment tools for investment managers to evaluate companies under climate impact aspects. The project also aims to structure new low-emission alternatives for the public investment funds landscape. The Sgreenvest project has the end goal of helping to accelerate sustainable investments, and turn them from a niche product to a mainstream one.

The role of Climate-KIC

Climate-KIC has helped to provide Sgreenvest with the access they need to new contacts through conferences and events, where they have been able to network with partners. This has helped to create and progress new ideas as well as helping to review progress and provide invaluable feedback. By leveraging the Climate-KIC network, Sgreenvest has been able to review their project, as well as learn from the past and experience of other partners to advance ideas into a thorough proposal.

“Being a Climate-KIC partner has been a tremendous benefit and allowed us to progress quite a few ideas that we would not have been able to as a small company.” Fredrik Fogde, South Pole Carbon Asset Management