A European Investment Bank Takes Steps to Reach Carbon Neutrality

We bring the right people together to challenge established thinking and drive transformation. Be work with our clients to build the capabilities that enable organisations to achieve sustainable advantage.

In 2020, the energy sector accounted for around 75% of worldwide greenhouse gas (GHG) emissions, highlighting the significant obligation placed on both the sector and its supporters to actively contribute to achieving net-zero goals. As an increasing number of financial institutions pledge to decrease their financed emissions, it has become imperative for them to comprehend the present carbon footprint and the future climate implications of their investments.

‍

This global investment bank and financial services firm has ingrained sustainability deeply into its mission and culture. It proudly holds membership in the UN-convened Net-Zero Alliance (NZBA), an esteemed coalition of global banks dedicated to aligning their lending and investment portfolios with net zero emissions by 2050.

It is a valued member of the UN-convened Net-Zero Asset Owner Alliance, an international collective of institutional investors committed to transitioning their portfolios to net zero within the same timeframe.

The firm's corporate ESG team was assigned the task of computing and monitoring the emission intensity of assets within its energy investment portfolio. This assessment aimed to portray a net-zero emissions scenario, illustrating a specific yet attainable trajectory for the global energy sector to attain emission neutrality by 2050. It became evident that the team required an expansion of its data and analytical capabilities to effectively carry out this vital sustainability endeavor.

Challenges

The ESG team faced challenges in evaluating the firm's energy investment portfolio due to the vast and intricate nature of climate and sustainability decisions, exacerbated by the limited availability of sufficient, reliable, and concise data. To achieve their objective of achieving net-zero emissions by 2050, they required:

1. Comprehensive access to data and analytics concerning greenhouse gas (GHG) emissions at regional, sector, corporate, and asset levels. This data would enable them to assess the carbon footprints of investments and identify climate-related risks throughout the portfolio.
2. Standardised data to facilitate consistent comparisons and benchmarking against peer groups.
3. The capability to monitor a company's progress towards net-zero targets and conduct climate scenario analyses to assess the portfolio's resilience to financial risks associated with climate change.

The Solution

The specialists from Global Green brought together a complementary set of capabilities, including commodity benchmark prices, market and asset data, forward-looking analytics, and consultative expertise. These resources provided valuable insights into global energy markets and the ongoing transition towards sustainable energy.

During the discussion, they highlighted the Corporate Emissions Solution, an integral component of the Carbon and Environment Energy Transitions package. This solution offered standardized data and analytics on greenhouse gas (GHG) emissions across the energy value chain and industrial sectors. Its purpose was to assess climate risks, facilitate investment decisions, and benchmark decarbonisation performance. The Corporate Emissions Solution presented several advantages for the ESG team, including the ability to:

1. Attain transparency into emissions data across the energy value chain.
2. Coverage of emissions data at the asset level encompassed sectors such as oil and gas exploration and production, gathering, transportation, processing, refining, power generation, agriculture, fertilisers, and biofuels.
3. Evaluate the carbon footprint of facilities, companies, or portfolios.
4. Standardised and harmonised granular data points supported consistent analysis, including emissions from over 10 billion tons of GHG emissions (CO2e) mapped across 50+ countries.
5. The data covered 50,000+ facilities and 5,000+ companies in the energy and industrial sectors, offering valuable insights for portfolio analysis.
6. Track emissions profiles of portfolio holdings over time.
7. Time series emissions data was available from 2010 to 2030, enabling the observation of trends and changes.
8. Drive scenario analysis by accessing crucial insights.
9. Key inputs for scenario analysis were provided, including absolute emissions, emission-intensity metrics at an asset level, and Scope 1 (direct) and Scope 2 (indirect) emissions reported on both a gross operational and net equity basis.
10. Additional information encompassed Scope 3 emissions, emissions sources (such as flaring, venting, and combustion), and primary asset-level product segmentation.
11. Simulate carbon efficiency gains at the portfolio level.
12. The solution's dashboards allowed users to compare base case and M&A scenarios, demonstrating the impact of adding or excluding assets on the overall emissions of the portfolio.
13. Monitor a company's progress towards net-zero goals and benchmark against peers.
14. Net-zero targets and metrics up to 2030, extracted from sustainability reports, were presented. This included Scope 1, 2, and 3 emissions, carbon price assumptions, and net-zero base year and percent reduction targets.
15. Choose from multiple data delivery options.
16. A robust data query tool allowed users to filter data by geography, sector, and company, enabling the creation of customised reports.
17. Additionally, an API option provided secure on-demand enterprise data access, allowing users to select the necessary data without hosting a database.
18. Receive unparalleled support.
19. Global Green boasted a team of experts with extensive knowledge and expertise in data, analytics, and global emissions markets, providing exceptional support to clients.

By leveraging these capabilities and resources, the ESG team could enhance their understanding of emissions data, facilitate informed decision-making, and navigate the path towards a sustainable and decarbonised future.

‍

The world is actively engaged in a global pursuit of decarbonization, recognising the significance of emission-related data as a fundamental pillar in endeavors to achieve net-zero greenhouse gas (GHG) emissions by 2050.

‍

Key Benefits

After recognising the numerous advantages of the Corporate Emissions Solution, the ESG team eagerly subscribed to the offering. As a result, they now enjoy the following benefits:

1. Significant time savings: With convenient access to standardised data and analytics on corporate greenhouse gas (GHG) emissions across the global energy value chain and industrial sectors, the team can efficiently retrieve the necessary information without wasting time on data collection and analysis.
2. Enhanced transparency: The solution enables the team to gain transparency into GHG emissions at various levels, including regional, sectoral, corporate, and portfolio levels. This newfound transparency empowers them to support their decarbonisation efforts and work towards achieving their stated net-zero goal by 2050.
3. Progress tracking: The solution provides the team with the ability to track their progression towards the net-zero goal over time under different scenarios. This tracking capability instills a higher level of confidence in their reporting and compliance requirements, allowing them to effectively monitor and assess their performance.
4. Informed investment decisions: With access to comprehensive data and insights, the team can guide their investment decisions more effectively. They can avoid assets that lack a sustainability strategy, ensuring that the portfolio remains on track towards its decarbonisation objectives.
5. Expert support: The team can rely on the assistance of highly experienced specialists from Global Green who possess a deep understanding of the global emissions market. This support ensures that they have access to expert guidance and insights when navigating the complexities of sustainability and emissions management.

Overall, the adoption of the Corporate Emissions Solution has revolutionised the ESG team's workflow, enabling them to save time, gain transparency, track progress, make informed decisions, and receive expert support in their pursuit of a sustainable and decarbonised future.