Carbon Impact Analytics: A Method for Developing Low-Carbon Investment Strategies

Carbone 4, a consulting firm specializing in the energy transition, has published a report for financial sector stakeholders to explain how the indicators from the Carbon Impact Analytics method can help them develop innovative low-carbon indices. Recognized for its expertise in energy and climate issues, Carbone 4 has been expanding its consulting services to the financial sector since 2010. The Carbon Impact Analytics methodology—co-developed with Mirova, a Natixis subsidiary specializing in responsible investment—is designed for investors, asset managers, and all financial institutions. This innovative tool provides them with indicators that enable them to reduce climate risks and capitalize on the opportunities associated with the energy transition in their investments.

Innovative low-carbon solutions

The purpose of this report is to present to financial stakeholders the benefits of the indicators derived from this method for adjusting investment allocations and developing new low-carbon indices. Indeed, the low-carbon indices derived from Carbon Impact Analytics differ from other indices on the market for several reasons:

• Calculating indirect emissions (Scope 3) allows for the consideration of transition risk in the broadest sense: this standardized and consistent approach enables an accurate comparison of the index’s components (including within the same sector);
• accounting for avoided emissions: to measure not only the risks but, above all, the opportunities associated with a company or an index;
• the creation of customized indices: to better address investors’ specific needs, based on their investment strategies.

A method that has already proven itself

The Carbon Impact Analytics method is already recognized by many financial institutions:

• The BNP Paribas Easy Low Carbon tracker, which is based on the Euronext Low Carbon 100 Europe Index using the Carbon Impact Analytics methodology, won the 2016 Innovation Award at the AGEFI ETF Grand Prix.
• IRCANTEC, a supplemental pension fund for civil servants, has selected the Carbon Impact Analytics method to measure the carbon footprint and coal exposure of its investments;
• CNP Assurances, a leader in the life insurance and loan insurance sectors in France, selected the Carbon Impact Analytics method in 2015 to analyze the carbon impact of its asset portfolio;
• Mirova used Carbon Impact Analytics as a climate assessment tool for five funds in 2015;
• The Investment Leaders Group (ILG), a network of institutional investors and asset managers affiliated with the University of Cambridge, used Carbon Impact Analytics in its report on the impacts of ESG-based investments.

PRESS CONTACT

Dorothée Coloby Phone: +33 (0)1 76 21 10 00 dorothee.coloby@carbone4.com

ABOUT CARBONE 4

Founded by Alain Grandjean and Jean-Marc Jancovici, Carbone 4 is an independent consulting firm specializing in the energy transition, which offers its expertise to public and private sector organizations. Convinced that proactively addressing carbon constraints is the best possible approach, Carbone 4 works with its clients to help them transform these constraints into a powerful driver of innovation, a source of competitive advantage, and a motivator for their teams. For the financial sector, Carbone 4 develops methodologies and tools tailored to each business line to enable them to measure and highlight the carbon impact of their financing activities and their contribution to the energy transition. In 2015, Carbone 4 established Carbon4 Finance, a subsidiary dedicated to developing Carbon Impact Analytics, an innovative method for measuring the carbon impact of investment portfolios.

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