Financed GHG Emissions Metrics

Definition

Financed GHG Emissions Metrics are metrics composed from GHG Emissions and financial data

Normalizing GHG Emissions data involves translating the financed Absolute Emissions to an emission intensity metric (emissions per a specific unit), and different intensity metrics can be used for different purposes. A wide array of intensity metrics is applied in the market and each has its own merits.

• Economic emissions intensity is the absolute emissions divided by the loan and investment volume, expressed as tCO e/€M invested or loaned. It can be useful for comparing different portfolios or parts of portfolios and for managing climate transition risks.
• Physical emissions intensity is the absolute emissions divided by an output value, expressed as tCO 2e/MWh, tCO2e/ ton product produced. It can be useful for setting SBTs and for comparing the emissions intensity of companies operating in the same sector.
• The weighted average carbon intensity (WACI) is expressed as tCO e/€M company revenue and can be used to understand a portfolio’s exposure to carbon-intensive companies.

Metric	Purpose	Description
Absolute emissions	To understand the climate impact of loans and investments and set a baseline for climate action	The total GHG emissions of an asset class or portfolio
Economic emissions intensity	To understand how the emissions intensity of different portfolios (or parts of portfolios) compare to each other per monetary unit	Absolute emissions divided by the loan and investment volume, expressed as tCO 2e/€M invested
Physical emissions intensity	To understand the efficiency of a portfolio (or parts of a portfolio) in terms of total carbon emissions per unit of a common output	Absolute emissions divided by an output value, expressed as tCO e/2MWh, tCO2e/ton product produced
Weighted average carbon intensity (WACI)	To understand exposure to carbon-intensive companies	Portfolio’s exposure to carbon-intensive companies, expressed as tCO 2e/€M company revenue