Assessments: Climate Risk & GHG Measurement
Index
Research
Climate Risks To Businesses And Society Research
GHG Accounting Research
Natural Capital Risk Assessment (on "Natural Capital, Biodiversity" page)
Water Risk Assessment (on "Water, Watersheds & Ocean" Page)
Evaluating Investor/Investment Risk (on "ESG Investment, Finance, Insurance" page)
The State of the Planet (on "Natural Capital, Biodiversity" page)
Tools
GHG Accounting Guidance & Tools
Climate / ESG Risk Assessment Tools
Collaboration
Collaborations To Advance Sustainability / ESG Assessments
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Research
Climate Risks To Businesses And Society Research
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Natural catastrophes resulted in economic losses of $280 billion in 2023, 38% ($108 billion) of which was covered by insurance, according to new data from Swiss Re. There were 142 insured-loss inducing catastrophes in 2023, a record number. Severe storm events also set a new record for insured losses, at $64 billion. Annual disaster costs are expected to grow 5-7% annually, with costs potentially doubling over the next ten years. (April 2024)
Higher temperatures from climate change increased food and overall inflation persistently in both higher- and lower-income countries,
according to a new study in
Communications Earth & Environment tracking data from 1996-2021. Effects varied across seasons and regions depending on climatic norms, with further impacts from daily temperature variability and extreme precipitation.
Under projected temperature increases for 2035, food inflation could increase 1-3% and total inflation 0.3-1.2% per year globally.
(April 2024)
Risks associated with global warming of 1.5 to 4°C above pre-industrial levels in human and natural systems in six countries (Climatic Change) — Assesses the risks of climate change to human and natural systems in China, Brazil, Egypt, Ethiopia, Ghana, and India at various temperature increases in 2100. Finds that greater warming is projected to lead in all countries to greater exposure of land and people to drought and fluvial (e.g. river) flood hazard, greater declines in biodiversity, and greater reductions in the yield of maize and wheat. Limiting global warming to 1.5°C (compared to 3°C) is projected to reduce harms, including less economic damages from flooding, and less exposure of agricultural land and populations to severe drought. Biodiversity retains more relatively safe areas in 1.5°C scenarios, but areas shrink significantly if warming reaches 3°C. Sea level rise will damage coastal nations less in a 1.5°C scenario. (March 2024)
Global economic losses from natural catastrophes reached $380 billion in 2023, up from $355 billion in 2022, according to Aon’s Annual Climate and Catastrophe Insight report. Of those losses, just $118 billion were insured, representing a 69% protection gap. Insured losses were 31% above the 21st-century average, exceeding $100 billion for the fourth year in a row. 95,000 people globally lost their lives due to natural disasters, the highest since 2010, primarily from earthquakes and heatwaves. (Jan 2024)
$143 billion per year of the costs of extreme weather events is attributable to climate change, according to new research in Nature Communications. The study, examining the period from 2000-2019, found that 63% of the total $2.86 trillion cost was due to human loss of life. It also found that estimates of the economic costs of climate change using Integrated Assessment Models “may be substantially underestimated.”
The global economic impact of extreme weather events could be $5 trillion over a five year period (with a range of $3 trillion to $17.6 trillion), according to a new systemic risk scenario by Lloyd’s. This scenario is based on a “plausible increase” in extreme weather events leading to breadbasket crop failures and significant global food and water shortages. The research also finds
there is a “significant climate risk protection gap,” with only about a third of the global economic losses caused by extreme weather and climate-related risks currently insured.
Three credit ratings companies — Fitch Ratings (in March), S&P Global Ratings (in January), and Moody’s Investors Services (in October 2022) — have issued warnings about the impact of climate-related risks on credit ratings, as noted in a new statement by the Institute for Energy Economics and Financial Analysis (IEEFA). As IEEFA notes, while these warnings have yet to result in tangible effects, they “will likely lead to rating volatility and instability, a costly affair for investors and issuers.” (Aug 2023)
Residential properties in the U.S. may be overvalued by between $121-237 billion, when factoring in their actual flood risk, according to a new study in Nature Climate Change. The difference in value is especially pronounced in coastal area and where disclosure of flood risk is not required in real estate transactions. 11% of properties contributed to 80% of the overvaluation, while 76% were overvalued by less than 5%. Low-income households (and local governments that depend on property taxes) are at greater risk from losing home equity from price deflation if housing markets fully capitalize exposure to flood risk. (Feb 2023)
FITCH RATINGS — Credit rating agency Fitch Ratings released a discussion paper outlining plans to use its Climate Vulnerability Scores (Climate.VS) to enhance its process for identifying potentially credit-relevant climate-related risks for credit ratings for non-financial corporates. Fitch will use Climate.VS as a screening tool to identify entities that are potentially more vulnerable to climate-related risks and subject them to additional analysis in its credit rating committees. The scores will focus on policy, market, and regulatory (not physical) risks, as Fitch deems these as having “a more severe credit impact” in the first half of this century. (Feb 2023)
Between 2011 and 2021, 90% of U.S. counties have experienced a flood, hurricane, wildfire, or other disaster severe enough to receive a federal disaster declaration, with some having as many as 12 disasters during that time, according to the new Atlas of Disaster from Rebuild by Design. In total, post-disaster assistance from FEMA and HUD totaled $91 billion, with Texas and Florida receiving the highest funding. However, as extreme heat has not been included in disaster declarations, this underestimates total events and costs. The report notes that the cost of flooding is forecast to be nearly $72 billion over the next 10 years and concludes that a 2% surcharge on insurance policies, such as Florida levies, could help raise $287 billion over 10 years to increase climate resilience to prevent future disaster damage rather than only mitigating it. (Nov 2022)
$4.3 trillion in rated debt held by 16 sectors is exposed to heightened environmental credit risk, twice as much as when the Paris Agreement was announced in November 2015, according to analysis by Moody's Investors Service. This is up 27% from December 2020 when 13 sectors were exposed. The research is based on Moody's review of 89 global sectors with total rated debt of nearly $83 trillion as of June 2022. (Nov 2022)
AXA Future Risks Report 2022 (AXA) — This ninth edition of AXA’s global survey on risks finds that climate change was at the top of experts’ risk list in all geographies for the first time. The survey is based on responses from 4,500 risk experts from 58 countries and 20,000 people from 15 countries, and explores risks based on potential societal impact over the next 5-10 years. Climate change was also the top concern in the US general population, also a first. Experts ranked geopolitical stability as the second top risk and cybersecurity as the third. (Oct 2022)
The Price of Plastic Pollution (Minderoo Foundation) — Corporate liabilities from plastic pollution, including environmental clean-up, ecosystem degradation, shorter life expectancy and medical treatment, could exceed $20 billion per year in the United States, and $100 billion globally between 2022 and 2030. Beyond 2030, corporate liabilities may increase by an order of magnitude. This report is a first-ever attempt to calculate quantitative estimates from both the social costs and corporate liabilities to plastics, chemicals, and waste companies from all forms of plastic-related pollution. Manufacturers of chemical additives used in plastics are most exposed to litigation risk. The report concludes with action steps for corporates, insurance companies, policymakers, and investors, particularly focused on more fully disclosing plastic-related pollution risks. (Oct 2022)
A new report from CDP shows that of 998 cities surveyed, 80% face significant climate hazards, including flooding, extreme heat, and drought. 25% of cities face high-risk climate hazards that they expect to be more intense and more frequent by 2025. And 63% of cities are taking “people-centered” climate action, which can improve residents’ health, and increase economic opportunities, social inclusion, and urban biodiversity. (Oct 2022)
Climate change, more extreme weather, and water stress could undermine energy security and jeopardize renewable energy supplies, according to a new report from the World Meteorological Organization (WMO). This report was released the same day as the U.S. National Oceanic and Atmospheric Administration announced September was the 5th warmest and 10th driest on record and that Hurricane Ian was the 15th billion-dollar weather or climate disaster so far in 2022. WMO points to the hot weather and drought this year as illustrative of how future extremes could impede power production. To address these challenges, WMO argues that countries must triple investments in renewables as well as invest in making energy infrastructure more resilient, such as retrofitting dams to new rainfall patterns and protecting plants from storm surges. (Oct 2022)
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A Safer Transition for Fossil Banking (Finance Watch) — The world’s 60 biggest banks have $1.35 trillion of exposures to fossil fuel assets, according to a new report by Finance Watch. Currently, climate-related risks associated with these assets are not reflected in bank capital rules to ensure banks can cover future losses. The report proposes applying a 150% risk weight as a first step against future financial losses. This would require additional capital of between $157-210 billion for these 60 banks. Failure to treat fossil fuel exposures as higher risk assets effectively provides an annual subsidy to the fossil fuel industry worth about $18 billion a year, according to the report. (Oct 2022)
Physical Risk Exposure Scores and Financial Impact (S&P Global Sustainable1) — S&P Global Sustainable1 launched a new dataset to support companies, investors, governments, and other stakeholders understand and manage the physical and financial exposure of corporates and portfolios to climate change. The dataset provides information on the exposure of over 20,000 companies and over 870,000 asset locations to eight climate change related hazards across four climate change scenarios. Applying the new dataset to the S&P Global 1200, 92% of the world’s largest companies will have at least one asset at high risk to a climate hazard by the 2050s. (Sept 2022)
The macroprudential challenge of climate change (European Central Bank (ECB)/European Systemic Risk Board (ESRB) Project Team on climate risk monitoring) — Finds that climate shocks could threaten the stability of the European financial system. Risks identified include:
- A surge in carbon prices could trigger cascading company defaults and credit losses for banks.
- Natural disasters could trigger either physical risk, abrupt impacts on market prices, or a “sudden reassessment of climate risk pricing,” which in turn could lead to a rapid sell off of exposed assets.
The report finds that "no meaningful reduction in emission intensity in the loan portfolios of euro area banks has taken place in recent years," and concludes that a disorderly transition (where carbon prices increase rapidly and substantially) could lead to losses of 3% of stress-tested assets by insurers and 25% by investment funds. An orderly transition, on the other hand, could boost EU economic output by 3% and reduce corporate defaults by 13-20% in 2050. (Aug 2022)
In its review of natural disaster data from the first half of 2022, German insurer Munich Re reveals lower natural disaster losses than in the comparative period of 2021. The U.S. topped the list again as the country with the highest weather-related losses, totaling around $28 billion and accounting for almost half of overall losses. In Europe, it is too soon to assign numbers to the losses associated with recent extreme heat, water scarcity and wildfires. Ernst Rauch, Chief Climate Scientist at Munich Re concluded that the consequences of climate change “are becoming ever more palpable” as a result of extreme weather and natural disasters. (Aug 2022)
The economic impact of climate change and the “social impact of carbon” could increase nearly 25% globally if 8 “tipping points” for Earth’s systems are passed, with a 10% chance of costs doubling and a 5% chance of them tripling, according to a study published in PNAS. (Aug 2022)
The Economic Case for Nature: A Global Earth-Economy Model to Assess Development Policy Pathways
(World Bank, University of Minnesota, Purdue University) —
Estimates the collapse of certain ecosystem services provided by nature (e.g. wild pollination, provision of food from marine fisheries and native-forest timber)
could cause an annual global GDP decline of $2.7 trillion by 2030. It argues benefits that would accrue in reaching the “30x30” biodiversity target or similar target would nearly offset the opportunity costs from protecting more land to meet the target. (July 2022)
Fueling the Flames
(First Street Foundation) —
Models 30-year US wildfire risk at property-level precision, incorporating the latest data on climate change. Through the companion
Risk Factor™ website,
property owners and prospective owners will have free access to probability-based wildfire risk data for the first time. Research accompanying the model indicates
climate change will cause a steep increase in the exposure of US properties to wildfire risks during the next 30 years. Researchers were particularly struck by the increasing risk in states like Texas and Florida, which historically fell outside of typical wildfire areas. Over the next 30 years, the model predicts (May 2022):
- 49.9 million properties with minor wildfire risk (<1% burn probability)
- 20.2 million properties with moderate risk (1–6% burn probability)
- 6 million properties with major risk (7–14% burn probability)
- 2.7 million properties with severe risk (15–26% burn probability)
- 1.5 million properties with extreme risk (>26% burn probability)
AT&T issued comprehensive, publicly available datasets—free to download here—underpinning new projections for how climate change will drive future wildfires and droughts across the contiguous 48 states. The data builds on their Climate Change Analysis Tool, first released in 2019 in collaboration with the U.S. Department of Energy’s Argonne National Laboratory, to model climate impacts over the coming 30 years. The company hopes that making this data public will help municipalities, universities, and other organizations with their climate adaptation efforts, as it has for AT&T’s own networks. (May 2022)
Weather Warning: Assessing Countries’ Vulnerability To Economic Losses From Physical Climate Risks (S&P Global Ratings) — Provides an analysis of 135 countries’ vulnerabilities and readiness, as well as potential average GDP loss by region, in the event of likely physical impacts from a range of climate change scenarios adopted by the IPCC. Key takeaways include (May 2022):
- Physical climate risks could expose from 3.3% to 4.5% of global GDP to losses by 2050 under 1.5C and business-as-usual scenarios, respectively.
- Risk to GDP is unevenly distributed based on each region's interplay between threat vulnerability and readiness. Regions comprised of countries where vulnerability is high and readiness is low will suffer the greatest losses (e.g., South Asia, which could lose as much as 18% of GDP by 2050—roughly ten times the exposure of Europe under the same climate scenario).
- Readiness rests largely on a given country's wealth and the strength of its financial and policymaking institutions. According to the report, "International cooperation and support are likely to be key to help ensure that the most vulnerable countries can finance adaptation strategies and build resilience to a global threat to which they have contributed relatively little."
The latest sigma study from the Swiss Re Institute shows a total global economic loss of USD 270 billion and insured losses of USD 111 billion from natural disasters in 2021, the fourth highest on sigma records. (April 2022)
- Flooding events were the most frequently occurring disaster event, and global economic losses from floods amounted to USD 82 billion in 2021, with insured losses at slightly more than USD 20 billion, indicating a large protection gap.
- Floods affected nearly a third of the world’s population and are predicted to increase with climate change and urbanization.
- Swiss Re's infographic provides additional information about the protection gap and the risk profiles of ten countries (Australia, Canada, China, France, Germany, Italy, Japan, Switzerland, U.K., and the U.S.).
Shifting Powers
(Lloyd’s Futureset, Cambridge Centre for Risk Studies)
— Explores three potential scenarios for the impacts of climate change on global geopolitics—”Green Globalisation,” “Climate Anarchy,” and “Green Cold War”—to help insurers and risk managers mitigate climate risk. “Green Cold War” is the most likely scenario, given current levels of cooperation. (Jan 2022)
The Turning Point: A New Economic Climate in the United States (Deloitte Economics Institute) — Analyzes how climate change could affect US productivity, economic output, and growth under two global warming scenarios. It finds that rapidly decarbonizing the U.S. economy would involve high upfront costs but could generate $3 trillion and add nearly 1 million jobs by 2070. If global warming reaches 3°C, the U.S. could lose $14.5 trillion and 900,000 jobs by 2070, including a 4% GDP loss in 2070 alone. (Jan 2022)
$329 billion of global economic losses in 2021 resulted from weather- and climate-related events, the third costliest year on record, according to Aon. Fifty events resulted in billion-dollar losses, and only 38% of 2021 losses were covered by insurance. (Jan 2022)
Climate hazards have caused over $2 trillion in global economic losses during the past two decades, including $20 billion in damage to the US grid in the last five years, according to BloombergNEF. Roughly one in five global power lines, as well as 435,000 miles of US power grids, are vulnerable to physical climate hazards. The US utilities sector could lose up to $4.1 billion annually due to such hazards. (Jan 2022)
List of Climate Risks to Business and Society Research, 2021-2017 (PDF)
GHG Accounting Research
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Greenhouse Gas Accounting Efforts Undermined by Disparate Tools and Frameworks (WWF) — Variability in product-level greenhouse gas accounting standards and methodologies can prevent companies from understanding both their true emissions and their progress in reducing them, according to this new WWF analysis. Greater harmonization in product-level accounting could accelerate progress and enable better cross-organizational comparison. The analysis offers four ways to increase harmonization: creating globally standardized or interoperable methodologies and reporting requirements for product accounting; providing quality control for collected data; collaborating among companies to get information from suppliers; and providing transparency in reporting. (Feb 2023)
A new survey by the Boston Consulting Group found that of 1,600 companies with revenues ranging from $100 million to greater than $10 billion, only 10% were measuring Scope 1, 2, and 3 emissions comprehensively, an increase of 1% on 2021 levels. Of these respondents, 64% noted they were able to reduce their emissions significantly. 70% of survey respondents claimed they foresee at least $1 million in annual benefits from emissions reduction, and 37% foresee these annual benefits will surpass $100 million. (Oct 2022)
Reuters surveyed 20 large tech and financial companies to find out whether (and, if so, how) they are tracking and incorporating remote employees’ carbon footprint in their corporate environmental impact reporting. The findings “underscore that remote work is not a simple solution to cutting corporate emissions,” according to the news agency. Increased use of heating fuel and electricity in the service of home offices can cancel out much of the benefit from reduced commuting emission, and corporate office space remains heated and lighted regardless of whether it is fully or partially occupied. In the absence of a standard methodology to quantify the net carbon footprint of remote or hybrid work, different companies are measuring and mitigating it in different ways, if at all. (May 2022)
A new
study by several scientists published in the Nature Climate Change journal" casts doubt on the accuracy" of global warming projections released during COP26,
according to
Axios.
When taking into account the uncertainties in how the climate will react to future GHG emissions,
modeling scenarios show that global warming could reach as high as 3.8°C above pre-industrial levels or as low as 1.7°C.
(Nov 2021)
Carbon Impact of Video Streaming (Carbon Trust) — Analyzes the carbon impact of on demand video streaming. Key findings (June 2021):
- The average carbon footprint of one hour of streaming in Europe is approximately 55 gCO2e, equivalent to microwaving four bags of popcorn in the UK.
- Adjusting picture resolution makes a very small difference in carbon emissions
- While streaming and internet use have grown these past few years, energy consumption from those activities has actually decreased over time.
- Consumer devices (TVs, laptops/PCs, smartphones, tablets) make up more than half of the carbon emissions from streaming (over 50%)
Of 1,290 companies surveyed across 9 global industries, only 9% of companies believe they measure their full emissions “comprehensively”; 81% don’t measure some of their Scope 1 and Scope 2 emissions; and 66% don’t report on any Scope 3 emissions, according to the Boston Consulting Group. (Oct 2021)
Climate TRACE, a coalition launched in July 2020 to independently track GHG emissions globally through satellite imagery, AI, remote sensing, and data science, released its
first results, which suggest that global emissions have been vastly undercounted.
The coalition—convened by
Al Gore,
think tank RMI, TransitionZero, WattTime, and others, and supported through initial funding from
Google.org
and a team of
Google.org Fellows—now includes 11 nonprofits, tech companies, and universities, with over 50 organizations having contributed datasets and AI models.
Key findings of the initial results, which show emissions trends across 10 sectors and 38 subsectors, include (Sept 2021):
- Of the world’s “top countries” that submit regular emissions inventories, the actual amount of oil and gas emissions may be nearly double—1 billion tons higher than—what’s been reported.
- It’s likely that over 1 billion additional tons of CO2 equivalent have been uncounted by countries that aren’t required regularly report on oil and gas emissions data
Greenhouse Gas Emissions From Food Systems: Building the Evidence Base
(U.N. FAO, NASA Goddard Institute for Space Studies, NYU, Columbia University)
—
Analyzes global food-system emissions by integrating all food-related emissions, including non-agricultural, which the
IPCC omits from its reporting guidelines. Researchers found the food system emitted 16 billion metric tons of GHGs in 2018, whereas the IPCC reported 5.3 billion metric tons of emissions. An accompanying
policy paper
encourages more holistic policy approaches for the sector. (July 2021)
Tools
GHG Accounting Guidance & Tools
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Open Emissions Database (Climate TRACE) — This new inventory provides independently produced estimates of nearly every major source of greenhouse gas emissions around the world, including facilities like power plants and steel mills, as well as fertilizer application, deforestation, and wildfires. The expanded database tracks emissions from more than 352 million assets, 4,400 times increase compared to the assets covered by the inventory last year. CEF members Boeing and General Motors, among others, are collaborating with Climate TRACE to leverage the database in decision-making processes to help drive decarbonization. (Dec 2023)
DELOITTE — Announced “a new connectivity-based approach to ESG data collection and sustainability management” that utilizes technology from AT&T and CEF member, Salesforce. Combining Deloitte Digital’s Sustainability 360, powered by Salesforce Net Zero Cloud, and AT&T’s asset connectivity solutions, the new solution will provide an audit-ready platform for ESG data management, and help organizations streamline their processes, enhance data integrity and accelerate the identification of sustainability improvement opportunities across their operations and extended enterprise. AT&T’s sensor technology will also provide direct connectivity with an organization’s emissions sources, improving the granularity of Scopes 1, 2, and 3 reporting. (July 2023)
Carbon Accounting 101 (National Academy of Medicine Climate Collaborative) — Hosted three pre-recorded Carbon Clinics to teach carbon accounting to health care delivery organizations. The webinar series covered the basics of carbon accounting while adhering to the Greenhouse Gas Protocol, including what data to collect, how to measure and report data, and real-world examples. Hospitals and health systems can browse the Carbon Clinics and related resources for steps to reduce their carbon footprint. This information is also relevant to organizations outside the health sector interested in learning more about the basics of carbon accounting. (June 2023)
Guidance on Avoided Emissions (World Business Council for Sustainable Development) — Provides credible accounting of avoided emissions (emissions savings that occur outside a company’s value chain), including clear separation from a company's greenhouse gas emissions. The guidance, based on input from leading global companies, academia, and technical experts, develops how avoided emissions can be calculated and leveraged by companies as well as financial institutions and governments. The guidance covers five key areas, including defining, leveraging, assessing, reporting, and ensuring legitimacy of avoided emissions. (March 2023)
Resources for the Future announced it is building a Carbon Scoring Project, an effort to provide U.S. policymakers with quantitative and qualitative climate information about their bills, reported in a standardized and accessible format. Just as bills receive budget scores, RFF will give bills carbon budget scores, measuring bills’ effects on greenhouse gas emissions, as well as consumer prices, air quality, and employment. (March 2023)
Towards Real Carbon Accounting (World Business Council for Sustainable Development (WBCSD) — Explores how to proceed with corporate carbon footprint calculations until a more complete, ledger-based accounting system is in place. The brief paper focuses on improving the accuracy and granularity of scope 1, 2, and especially scope 3 emissions. To achieve this with difficult-to-track scope 3 emissions, the paper recommends identifying the largest source of emissions of purchased products or at a supplier level; request suppliers provide most significant emissions; work with suppliers to identify and implement opportunities to reduce emissions; expand the number of products and suppliers included; and continuously improve on carbon data quality and accessibility. (March 2023)
Technical Specifications for PCF Data Exchange (Version 2.0.0) (Partnership for Carbon Transparency (PACT)) — PACT has released updated technical specifications for the standardized exchange of emissions data, enabling organizations to exchange Product Carbon Footprint (PCF) information. Technology solutions, ranging from procurement and supplier management systems to carbon management software, can now exchange product-related carbon emissions data using the same standardized technical language. Enabling such data sharing represents a significant step towards carbon transparency and supply chain decarbonization at scale. The specifications include a data model to exchange PCF information between systems; the data quality of PCF information; and information related to the assurance and verification of the PCF. (Feb 2023)
GTI Energy’s Veritas initiative — Announced new open-source methane emissions measurement protocols to accurately measure and reduce methane emissions. These come after a year and a half of collaboration between 35 companies to shape the protocols’ development. The protocols cover six segments of the natural gas supply chain, including production, gathering and boosting, processing, transmission and storage, distribution, and liquefied natural gas. The protocols include: methane intensity, measurement, reconciliation, supply chain summation, and assurance. (Feb 2023)
Lyft Rideshare Emissions Tracker (Lyft) — Lyft has launched a new tool to help Lyft Business customers track their rideshare-derived greenhouse gas (GHG) emissions on the Lyft platform. Partners will now be able to access a new sustainability dashboard within the Lyft Business Portal that displays the GHG emissions their organization has generated through their usage of Lyft Business solutions. This includes total emissions, emissions by fuel type (gas, hybrid, and EV), and emissions by programs (e.g. department or location), and will be downloadable to support company reporting and analysis. (Feb 2023)
Pathfinder Framework: Guidance for the Accounting and Exchange of Product Life Cycle Emissions Version 2.0 (World Business Council for Sustainable Development) — This second version of the Partnership for Carbon Transparency’s Pathfinder Framework updates the 2021 edition. The framework addresses a key carbon accounting challenge: the exchange of consistent supplier-specific product carbon footprint (PCF) data across the value chain. It seeks to help businesses develop a better understanding of their value chain emissions by encouraging and guiding the exchange of PCF data across value chains. The updated version incorporates further clarity and guidance in six areas: hierarchy for the application of product category rules; quality safeguards for secondary data sources; more specific accounting guidance; data quality indicators; an assurance and verification roadmap; and incorporation of PCFs into Scope 3 inventories. (Jan 2023)
End-to-End GHG Reporting of Logistics Operations — This new guidance, released by Smart Freight Centre and WBCSD, in partnership with over 30 companies, advances the quantification and sharing of logistics emissions and supports the logistics industry as they move toward net-zero. The guidance is designed to enable companies to better understand and track their logistics emissions on a granular operational level and to quantify the footprint of end-to-end logistics emissions, from supplier to final customer. It builds upon and complements two existing frameworks, the Smart Freight Centre’s Global Logistics Emissions Council Framework 2.0 (for logistics emissions) and WBCSD’s Pathfinder Framework (for product life cycle emissions). Participating CEF members include Amazon, Dow, Siemens, and Unilever. (Jan 2023)
Methane Alert and Response System (MARS) (UNEP International Methane Emissions Observatory) — MARS is the first public global system providing rapid, actionable and transparent data on methane emissions provided by satellites. It will use state-of-the-art satellite data to identify major emission events, notify relevant stakeholders, and support and track mitigation progress. The data will be available to policy makers, businesses and the general public. (Nov 2022)
Carbon Intensity Assessments and Price Premiums for Transportation Fuels (S&P Global Commodity Insights) — S&P Global Commodity Insights announced that it will launch the industry's first-ever carbon intensity estimates for diesel, gasoline and jet fuel, along with daily carbon offset price premiums on November 15th. The carbon intensity estimates for refined products will help refiners, investors, shareholders and downstream purchasers better understand the emissions attributes of these key transportation fuels and improve transparency of how carbon intensity is calculated. (Nov 2022)
Climate TRACE (Climate TRACE) — The Climate TRACE coalition released the most detailed facility-level global inventory of greenhouse gas (GHG) emissions to date, including emissions data for 72,612 individual sources worldwide, including power plants, steel mills, and oil and gas fields. This release includes 2021 data, expanding the dataset from 2015 to 2021, and includes the ability to examine the data by different GHGs. The data, using satellite observations, AI, and machine learning, provides more comprehensive data than self-reported industry data, and puts total global GHG emissions at 37% higher than the International Energy Agency’s 2021 estimate. Climate TRACE found that while the top 500 individual sources of emissions worldwide represent less than 1% of total facilities in the dataset, they accounted for 14% of global emissions in 2021. (Nov 2022)
The Sustainable Apparel Coalition and the UN Climate Change-convened Fashion Industry Charter for Climate Action developed new guidance to help apparel and footwear companies more efficiently and consistently measure their purchased goods and services emissions (the vast majority of companies scope 3 emission). The public can give feedback on the guidance until November 30, 2022. (Nov 2022)
MICROSOFT — Released updates to Microsoft Cloud for Sustainability to help other organizations accelerate their sustainability progress. This tool helps organizations track greenhouse gas (GHG) emissions, both directly (Scopes 1 and 2) and across its value chain (Scope 3). Microsoft also made available the Emissions Impact Dashboard for Microsoft 365, which allows customers to quantify GHG emissions associated with their organization’s use of Microsoft 365 applications, broken down by Scopes 1, 2, and 3. (Oct 2022)
The Global Battery Alliance (GBA), a multi-stakeholder organization to establish a sustainable battery value chain by 2030, launched its Greenhouse Gas Rulebook for calculating and tracking the greenhouse gas (GHG) footprint of lithium-ion batteries in electric vehicles. The Rulebook is the first framework of its kind to facilitate the collection of standardized, auditable, and comparable GHG data for batteries, setting out 80 globally harmonized rules in easy-to-use format. It was developed with input from 41 GBA members, including CEF member BASF. (Oct 2022)
Measuring corporate Paris Compliance using a strict science-based approach (Nature Communications) — Academics proposed a new set of conditions any emissions allocation methodology must meet before being classified as Paris-Compliant, and compared it against an initial scope of global companies. The proposal included four operationalization requirements for companies to declare they are on “Paris-Compliant Pathways,” including calculations of their carbon budgets. Of the ten global cement companies and ten Australian energy companies analyzed with the conditions, all but one of the companies (Engie) failed to be Paris-complaint. (Aug 2022)
ALIBABA CLOUD — Announced the global launch of Energy Expert, a sustainability platform to help companies automate carbon accounting and reporting at the corporate and full-life-cycle product levels. On the product side, the platform measures against established standards (PAS 2060 and ISO 14064). Energy Expert also provides real-time impact statistics that can be used to refine sustainability performance in a nimble way. The software-as-a-service was deployed in China in February 2022 and has served over 2,000 companies there to date, driving a reported reduction of 400,000 tons of carbon dioxide emissions. (July 2022)
Oil Climate Index plus Gas (OCI+) (RMI) — The open-source web tool quantifies and compares full life-cycle GHG emissions intensities from half of the world’s global oil and gas assets. Users are able to assess the relative climate impacts of different segments within the supply chain based on how fuels are produced, processed, shipped, and consumed. The tool is accompanied by the Know Your Oil and Gas report, which among its many insights, suggests open-source data is essential for aligning the oil and gas sector with a safe climate future. (June 2022)
BOSTON CONSULTING GROUP (BSG) / SAP —
The strategy consultancy and enterprise software company have
joined to launch a “Sustainability Transformation” offering to help companies more rapidly: (1)
integrate state-of-the-art carbon tracking, including Scope 3 emissions, into their core business operations and strategic decision-making; and (2)
assess circularity opportunities across their supply chain and product portfolio. (March 2022)
“The Business Carbon Calculator” (Normative, with support from Google.org) — A new carbon calculator to help small- to medium-sized enterprises measure, track, and reduce their carbon emissions. The tool is an extension of the Industry CO² Insights tool and is available for free through the SME Climate Hub. (March 2022)
Carbon Sense suite (Google) — A new suite of Google’s existing tools to help companies report on and reduce the carbon emissions associated with their Google Cloud usage. It includes the Carbon Footprint solution and new Active Assist sustainability recommendations to estimate the gross emissions saved by removing idle projects. (Feb 2022)
SALESFORCE — Rolled out its Net Zero Cloud 2.0 solution globally to help businesses track, analyze, and report on their environmental data. (Feb 2022)
List of GHG Accounting Guidance & Tools, 2021-2019 (PDF)
Climate / ESG Risk Assessment Tools
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Energy Climate Scenario Catalogue 2.0 (WBCSD) — Enables businesses to conduct strategic climate resilience assessments and explore transition pathways. The catalogue, an update of the original version developed in 2022, outlines the dependencies and uncertainties across various possible temperature and energy system outcomes. It contains 17 scenarios from six leading scenario providers, with variables across investment, demand, emissions, capacity, cost, and price. In version 2.0, new scenarios were added and several were updated, and new variables were added, including commodity demand, end-use sector demand disaggregation, energy service demand, sales, and additional fuels. (April 2023)
Carbon Heatmap (EcoVadis) — Added a Carbon Heatmap to its Carbon Action Module, which provides companies a carbon emissions risk mapping tool to identify carbon hotspots across their trading partners. The tool can help companies identify the highest potential areas for GHG performance improvement and develop actionable carbon emissions reductions strategies. (March 2023)
ESG Analyzer (Broadridge Financial Solutions) — This new web based ESG disclosure and data analytics benchmarking tool enables companies to better understand their ESG data and how they compare to chosen peers and their industry, helping them to improve their ESG strategy and practices. The tool provides a repository of public ESG disclosures, covering more than 5,000 issuers in North America. It includes more than 385 ESG topics and tracks disclosures across leading ESG frameworks. (Jan 2023)
TCFD Climate Scenario Tool for Food, Agriculture and Forest Products (WBCSD) — This new tool provides a method for companies to assess potential risks and opportunities, specific to food, agriculture, and forest products sectors, from society’s response to climate change. The tool offers outputs covering business, land use, and environmental factors across 23 crop, animal product, and forest product commodities and 18 regions. This complements WBCSD’s existing Energy Climate Scenario Tool. (Dec 2022)
ESG Tools (EY US and Thomson Reuters) — This new set of ESG tools is designed to help meet companies’ need for supply chain risk assessment and monitoring and ESG-related regulation tracking. The Supply Chain Risk Identification tool helps identify ESG-related supply chain risks, such as forced labor. The ESG “Green” Tax Framework provides research and data tracking for ESG tax laws, regulations, policy developments, and industry insights. (Dec 2022)
Climate Risk & Resilience Portal (ClimRR) (Center for Climate Resilience and Decision Science (CCRDS) at Argonne National Laboratory, AT&T, and FEMA) — This new modeling website advances access to cutting-edge science for climate projections to help improve U.S. preparedness for future climate extremes. ClimRR gives state, local, tribal and territorial emergency managers and community leaders free access to localized (and non-technical) data about future climate risks that can be used to explore strategies for resilience. Initial hazards included are temperature, precipitation, wind, and drought conditions. Additional risks, such as wildfire and flooding, will be added in the coming months. (Nov 2022)
Bloomberg released Implied Temperature Rise Metrics to help investors determine how companies and portfolios align with climate risk goals. These metrics, based on Temperature Rating methodology developed by the Science Based Targets initiative (SBTi), will help a company connect its climate emissions and objectives with projected global temperature rise. (Nov 2022)
The Physical Climate Risk Assessment Methodology (PCRAM) — This global practitioner’s guide, developed by Mott MacDonald and the Coalition for Climate Resilient Investment, supplies practical tools to identify and assess the resilience of infrastructure assets. Designed to enhance the financial valuation of investments, instead of minimizing losses, PCRAM uses a new methodology that gives infrastructure owners and operators the means to evaluate physical climate risks to infrastructure and analyze their long-term impact on asset performance. (Oct 2022)
CTrees — The non-profit CTrees will launch the first ever digital platform for calculating the carbon in every tree on the planet at COP27. The platform offers high-accuracy, AI-enabled satellite data products that allow countries, jurisdictions, the private sector, and civil society to measure, report, and verify both carbon emissions and removals from all types of forests. CTrees will help stakeholders engaged in the carbon market to understand carbon emissions potential of forest investments. (Sept 2022)
Climate Alpha— A new software platform provides guidance on where property developers, insurers, and asset managers should invest in real estate in the U.S., based on climate risks, along with socioeconomic and market variables. Mastercard, Homebuilder Lennar, and asset manager BentallGreenOak are among Climate Alpha’s partners and customers. (Sept 2022)
“Climate Scenario Analysis Reference Approach” and “Climate Scenario Catalog v1.0” (World Business Council for Sustainable Development) — A new report and online platform to provide a common, transparent approach for using climate scenarios to support strategic resilience assessment, and to explore transition pathways, dependencies and uncertainty across a range of possible temperature and energy system outcomes.
- The Climate Scenario Analysis Reference Approach explores ways business uses climate scenario analysis and outlines principles for making choices using the Catalogue, with examples of use cases.
- The Climate Scenario Catalogue v1.0 developed by Vivid Economics, collates 18 scenarios with variables ranging across investment, demand, emissions, capacity, cost and price, allowing for the navigation, comparison and exploration of scenarios over time.
Together they support companies in following TCFD recommendations to assess their strategic resilience and the COP26 Private Finance Agenda. (March 2022)
Wildfire AI (Terrafuse AI) — The weather- and climate-risk forecasting developer launched a new, free public tool that tracks the risks of wildfires through predictive modeling. A risk score is created using Earth observation data as well as machine learning techniques processed on Microsoft Azure. Partners include Microsoft AI for Earth. (Oct 2021)
“Environmental, Social, and Governance (ESG) Risk Rating” (Marsh) — An assessment tool to measure an organization’s ESG performance, enabling it to identify its most critical sustainability and climate-related risks and opportunities. The rating scores a client’s performance across 18 ESG themes, measured against more than 10 internationally recognized standards and frameworks published by leading organizations including the Global Reporting Initiative, Sustainability Accounting Standards Board, Task Force on Climate-related Financial Disclosures, and the World Economic Forum. (March 2022)
- CEF Member Liberty Mutual Insurance is collaborating with Marsh to offer its clients in the US and Canada complimentary access to risk advisory services relating to sustainability and climate-related risks and opportunities when they opt-in to the ESG Risk Rating.
Carbon Neutrality Solution (ESG Enterprise) is a new SaaS solution that helps businesses create net-zero strategies and execution plans while simultaneously managing transitional and reputational risks. Features include climate modeling and GHG quantification, reduction, and offsets management automation. (February 2021)
The Sustainability Assessment Framework (SASF) is a comprehensive assessment framework developed by the The Global Enabling Sustainability Initiative (GeSI) for the evaluation of Information and Communication Technology (ICT) products and services in terms of environmental, human rights and utility aspects as well as benefits.
GEMI Metrics Navigator - A web-based tool that helps organizations develop and implement the “critical few” metrics that provide insight into complex issues and contribute to business success.
Future Fit Business Benchmark - Offers a set of performance criteria that describe a company that is fit for the future: one that will flourish while adding to the wellbeing of society as a whole.
2021 FM Global Resilience Index (Global Resilience Index Initiative) — A new, open-source, first-of-its-kind tool that ranks nearly 130 countries by the climate resilience of their business environments. It was created to harmonize global climate-resilience measurements, help executives prioritize their enterprise risk management and investment decisions, and help countries prioritize climate-adaptation investments. (Nov 2021)
Collaboration
Collaborations
To Advance Sustainability / ESG Assessments
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Global Avoidance Factor Database — A group of 11 investors launched a call for expression of interest to develop a database of avoided (or “Scope 4”) emissions. The goal is to enable the creation of a globally accessible and common database of avoidance factors (i.e. specific activities or technologies enabling emissions avoidance) and estimate emissions by a wide range of companies (starting with 1,500 companies with the largest global market cap), using the database. The database aims to look at a variety of economic activities central in decarbonization (such as power and heat generation, building, transportation, mining, food and agriculture, forestry, mining, and textiles). The group is inviting participation by interested parties by 16 July 2023. (May 2023)
Microsoft Climate Research Initiative — A network of research scientists from academia, industry, government, and civil society working with CEF member Microsoft’s computing experts and machine learning tools to accelerate progress on urgent climate-related challenges. The initial focus will be on three project areas "where computational advances can drive key scientific transformations:" 1) Overcoming constraints to decarbonization; 2) Reducing uncertainties in carbon accounting; and 3) Assessing climate risks in greater detail. All results from the Initiative will be publicly available for free and are intended to provide strategic direction for climate-related research priorities and investments. (July 2022)
EcoBeautyScore Consortium — 36 cosmetics and personal care companies, and business associations joined the collaboration “to develop an industry-wide environmental impact assessment and scoring system for cosmetics products.” They are inviting other companies to join the effort, with a prototype targeted for year-end 2022.
New signatories include Johnson & Johnson Consumer Inc. (of CEF member
Johnson & Johnson) and
Procter & Gamble.
(March 2022)
Impact Management Platform — Global providers of sustainability standards and guidance formed a new collaboration “to mainstream the practice of impact management.”
It is the next phase of a five-year, global collaboration facilitated by the
Impact Management Project (IMP). The Platform’s Steering Committee will advise the new International Sustainability Standards Board, and Platform partners will work to “consolidate existing sustainability resources, collectively address gaps, and coordinate with policymakers and regulators.” IMP advisors include CEF members
Bank of America and
BlackRock, and IMP Practitioners include CEF member
Oracle.
Founding Platform partners: standards organizations (including GRI), NGOs (including CDP), UN initiatives (including the UN Global Compact), multilateral organizations (including the OECD), and groups such as Principles for Responsible Investment (including CEF member
Bloomberg L.P.), the Capitals Coalition (including CEF members
Dow, TD Bank,
and Unilever), and the Global Impact Investing Network (including CEF members
Bank of America, JPMorgan Chase & Co.,
and
Morgan Stanley). (Nov 2021)
Google Cloud is partnering with 5 companies to accelerate data-driven innovation to help businesses and governments tackle climate-risk exposure. The companies—CARTO, Climate Engine, Geotab, NGIS, and Planet—will bring their applications to Google Cloud, as well as over 50 petabytes of satellite imagery, mobility, demographics, and telematics data. Notably, the NGIS platform can “illuminate” company supply chains, and Climate Engine will input datasets on climate risks such as wildfire spread and water use. (Oct 2021)
New consortium on cosmetics environmental impact — Unilever, Henkel, L’Oreal, LVMH and Natura & Co
announced a collaboration to “co-develop an industry-wide environmental impact assessment and scoring system for cosmetics products” and are inviting other cosmetics companies to join the effort. (Sept 2021)
“Levelized Cost of Carbon Abatement: An Improved Cost-Assessment Methodology for a Net-Zero Emissions World” (The Center on Global Energy Policy at Columbia University SIPA, October 2020) sets out an improved methodology for comparing technologies and policies based on the cost of carbon abatement. The methodology provides insight into the highest value for carbon reduction, the relative discrete costs and benefits for decarbonization options, and the potential shortfalls in policy or portfolio goals.