Climate Impact Analysis

An influential stream of research finds that companies that emit more carbon have higher stock returns. This "carbon premium" has been interpreted as evidence that emitting companies suffer a higher cost of capital and thus markets are correctly pricing in carbon risk. However, the ESG literature typically interprets higher stock returns as outperformance due to mispricing. In a new paper with Yigit Atilgan, Özgür Demirtaş, and Doruk Gunaydin, we study earnings surprises to disentangle these explanations. We find that emitting companies enjoy positive earnings surprises, and the four earnings announcements per year explain 30-50% of the annual carbon premium. Consistent with prior results, our findings only hold for levels of and changes in emissions, but not emissions intensities or disclosed emissions only. Our results suggest that, where it exists, the carbon premium arises from an unpriced externality - emitting companies are able to "get away with" contributing to global warming. Markets are not fully pricing in carbon risk, highlighting the need for government action. https://lnkd.in/e9QnXars

Monitoring and reporting of Scope 3 emissions 🌎 Scope 3 emissions represent the largest share of an organization's carbon footprint, encompassing indirect emissions across the value chain. A structured approach to measurement, commitment, transformation, and disclosure ensures comprehensive reporting and alignment with global sustainability standards. Organizations must integrate Scope 3 emissions into their reporting frameworks to enhance transparency and drive meaningful reductions. Accurate measurement is the first step in managing Scope 3 emissions. Methodologies such as the Greenhouse Gas (GHG) Protocol and ISO 14064 provide guidance on calculating emissions across relevant categories. Reporting standards, including GRI, CDP, and IFRS S2, establish principles for disclosure, ensuring that organizations quantify emissions in a way that is comparable and actionable. Setting a clear baseline allows companies to identify high-impact areas and prioritize reduction efforts. Commitment to science-based targets supports long-term emissions reductions. The Science Based Targets initiative (SBTi) offers frameworks for setting ambitious yet achievable decarbonization goals. Alignment with standards such as CSRD ESRS E1, ISSB, and SASB ensures that Scope 3 targets are integrated into broader corporate sustainability strategies. Effective emissions reduction requires collaboration across the value chain, emphasizing supplier engagement and business model innovation. Transforming business operations is essential to reducing Scope 3 emissions. Companies must optimize supply chains, shift toward low-carbon materials, and explore alternative logistics solutions. Investments in circular economy strategies, renewable energy adoption, and efficiency improvements contribute to emission reductions. Partnerships with suppliers and industry stakeholders strengthen impact and accelerate progress toward decarbonization. Scope 3 emissions are categorized into upstream and downstream activities, capturing emissions beyond direct control. Upstream activities include purchased goods and services, capital goods, fuel and energy-related activities, transportation, business travel, and employee commuting. Downstream activities involve emissions from transportation and distribution, product processing, end-of-life treatment, leased assets, and investments. Each category requires tailored approaches to measurement and mitigation. Scope 1, 2, and 3 emissions interact within a company’s sustainability strategy. Scope 1 emissions originate from direct sources such as company facilities and vehicles. Scope 2 emissions result from purchased electricity, steam, heating, and cooling. Scope 3 emissions extend beyond organizational boundaries and often require coordinated efforts with external partners to influence change across the value chain. Source: Deloitte #sustainability #sustainable #business #esg #climatechange #scope3 #emissions

🌍 Understanding and Reducing Your Carbon Footprint 🌱 Climate change is one of the most pressing challenges of our time. The “Guide for Carbon Footprint Assessment” highlights key steps to measure and manage greenhouse gas (GHG) emissions effectively. Here’s what you need to know: 📌 What is a Carbon Footprint? The total GHG emissions caused directly or indirectly by individuals, organizations, or products, expressed as CO₂ equivalents (CO₂e). 📌 Why Assess Your Carbon Footprint? • Reduce emissions over time 🌱 • Report for regulatory compliance 📊 • Enhance sustainability efforts 🌍 📌 How to Calculate Your Footprint: 1️⃣ Identify emission sources (energy, transport, waste, etc.). 2️⃣ Use the formula: GHG Emissions = Activity Data × Emission Factor. 3️⃣ Apply tools like IPCC guidelines or calculators (e.g., ICAO for air travel). 📌 Applications: • Organizations: Manage emissions across Scope 1, 2, & 3 categories. • Projects: Evaluate GHG reductions from initiatives like renewable energy. • Products: Measure lifecycle emissions (raw materials → disposal). 📌 Towards Carbon Neutrality: Calculate ➡️ Reduce ➡️ Offset residual emissions with projects like renewable energy or afforestation. Reducing our carbon footprint is not just a necessity; it’s an opportunity to drive sustainability and innovation.

A lot has changed in the last couple of years. LiDAR for biomass measurement is now a real option for carbon projects today (tech and efficiency advances). I believe this will become the 'new standard' for the highest quality nature-based carbon projects in the next few years 🌳. Most projects in the Voluntary Carbon Market still rely on traditional approaches—manual measurements of tree diameter using a tape measure and generalised allometric equations. These methods were, for many years, the only viable option. They are low-cost, relatively simple to implement, and have contributed significantly to the growth of the forest carbon sector. While low cost, these approaches suffer limitations with precision, accuracy validation, and auditability. And as expectations for scientific integrity rise, their limitations—particularly around uncertainty and bias—should no longer be overlooked. As seen in the amazing work conducted by Sylvera, these methods can under- or over-estimate carbon by 1.5x to 2.2x. In many cases, these errors have not been appropriately reflected in project-level credit deductions. For a market whose core unit is a ton of CO₂, accurate measurement of biomass is critical. The tools now exist. The bar is rising. And it's time for a new generation credits underpinned by LiDAR-backed biomass measurements. At Revalue, we’re investing to demonstrate what is possible and get ahead of what is coming. 🌍 In Ruvuma Wilderness, Africa’s largest community-led project, we worked with Carbon Tanzania to: - Capture 19 billion data points, from canopy to understory - Scan trees at <7mm resolution - Pair under canopy (TLS) LiDAR scanning with larger area drone-based (ALS) LiDAR We are now creating a new “ground truth” that does not require allometric equations. Next, we fuse this with aerial (drone) LiDAR and high-quality geospatial data (via our partner Chloris Geospatial), integrating it with species-specific data. We’re using these measurements as part of creating auditable, scientifically-rigorous baselines for carbon projects. If we want scientifically-rigorous credits, we need scientifically-rigorous measurement. #CarbonMarkets #NatureTech #CarbonCredits #Biodiversity #ClimateAction #NatureBasedSolutions #ClimateTech #RegenerativeFinance #VoluntaryCarbonMarkets #ESG #NetZero #ClimateInnovation #CarbonRemoval #EnvironmentalFinance Nicolas L., Alexandra Ponomarenko, Charlotte Wheeler, PhD, Gabriel Cardoso Carrero, Carolina Ramirez Mendez, Dimas Maulana Ichsan

GFANZ consultation on transition finance and decarbonization contribution methods! Glasgow Financial Alliance for Net Zero (GFANZ) has released guidance that defines four different key transition financing strategies 1. Climate solutions: Entities and activities that develop and scale climate solutions 2. Aligned: Entities that are already aligned to a 1.5 C pathway 3. Aligning: Entities committed to transitioning in line with 1.5 C pathways 4. Managed phaseout: The accelerated managed phaseout of high-emitting physical assets On decarbonization contribution methods, they introduce the concept of Expected Emission Reduction (EER) that is applicable across the four transition financing strategies above but with distinct impact measurement approaches for each. Similar to the “expected return” of a financial decision, the EER could be quantified to express the “emissions return” of a financing activity. The consultation runs until Nov. 2 so have a read and share your perspectives on this important framework. Eager to hear perspectives on the EER below too! https://lnkd.in/etuY5HiK #climatefinance #sustainablefinance #transitionfinance #netzero #decarbonization #capitalmobilization #climateweeknyc #consultation #finance #transition #gfanz

I came across an interesting website : electricitymaps.com - this gives you an idea about Carbon Intensity for a region for different times of a day. Now - here is an interesting way I imagine this can be useful. If you work on Distributed Systems and batch scheduling on Cloud / On Premise, you can time your batch jobs to slash both carbon emissions and costs! You can use information from this website to schedule batch jobs (provided they still adhere to the SLAs) Let's take California's data as an example. Electricity Maps shows a dramatic drop in Carbon Intensity (CI) on weekdays from 10 pm to 6 am. This is because the state relies heavily on renewables like solar during the day. At night, the grid uses cleaner sources like hydropower, leading to a 50% lower CI compared to peak hours. Imagine a company needs to process a large dataset every night to generate reports. Traditionally, they might run the job at 8 pm, prioritizing speed. However, by scheduling the job for 11 pm, they can leverage California's lower CI window. This reduces their carbon footprint while still meeting the morning deadline! Here's the exciting part: Lower CI often translates to lower energy costs from cloud providers. So, you're not just helping the planet - you're potentially saving money too! I wonder if any schedulers out there can leverage this data to have carbon efficient scheduling 💪 #SustainableCloud #CloudOptimization #TechForGood

Navigating Voluntary Net-Zero Emissions Targets In a world where climate action is paramount, understanding voluntary net-zero emissions targets is essential for businesses to drive sustainability. As organizations strive to reduce their carbon footprint, they encounter a myriad of targets set by various initiatives like the Science Based Targets initiative, RE100, and more. Navigating this landscape requires a strategic mindset. 1) businesses must assess their current emissions and set ambitious, yet achievable, goals. Transparency is key in gaining stakeholder trust. 2) collaboration is crucial. Partnering with suppliers, customers, and industry peers can create a ripple effect of positive change. 3) innovation plays a pivotal role. Embrace new technologies and practices that streamline operations while minimizing environmental impact. 4) continuous measurement and adjustment are non-negotiable. Regularly assess progress, learn from setbacks, and adapt strategies accordingly. These voluntary targets are not just about compliance; they showcase the commitment to a sustainable future. #NetZero #Sustainability #ClimateAction #Business #emissions #climatechange #strategy #management

81% emission reduction by 2035 for the UK! The UK’s strengthened climate commitments under the UN Framework Convention on Climate Change set a new target of reducing greenhouse gas emissions by at least 81% from 1990 levels by 2035. This ambitious goal, which exceeds the previous 68% reduction target for 2030, indicates a strong shift towards deeper decarbonisation, positioning the UK as a global leader in climate action. 1. Regulatory and Compliance Pressures: UK businesses, particularly in high-emitting sectors like energy, manufacturing, and transport, will likely face stricter environmental regulations. Increased investment in clean technologies may be required to meet these targets, including the adoption of low-carbon options like hydrogen and carbon capture. 2. Incentives and Opportunities in Clean Energy: Government support for clean energy, such as lifting restrictions on onshore wind and funding for carbon capture, creates opportunities in renewable energy sectors. Companies investing in sustainable tech and infrastructure are likely to benefit from increased support. 3. Energy Costs and Security: The aim for a net-zero power grid by 2030 suggests businesses could see a more stable energy supply. In the short term, energy costs may rise as the transition unfolds, especially for businesses reliant on fossil fuels, though renewable sources could eventually lower long-term costs. 4. Carbon Pricing and Financial Impacts: Higher carbon prices under the UK’s Emissions Trading Scheme mean higher costs for carbon-intensive operations, creating financial incentives to decarbonise. Businesses that act quickly may benefit from selling carbon credits, offsetting some transition costs. 5. Supply Chain Adaptation: Businesses may need to adjust supply chains to reduce their environmental impact, potentially sourcing from lower-emission suppliers and adopting circular economy practices. 6. Global and Competitive Positioning: The UK’s ambitious targets could give businesses a competitive advantage globally by aligning with these standards, especially as similar targets may emerge in other regions. 7. Workforce and Skills Development: The shift to green energy and sustainable infrastructure will require a skilled workforce, creating opportunities for businesses to invest in green jobs, training, and innovation. In summary, the UK’s enhanced climate commitment will drive businesses towards faster decarbonisation, potentially raising operational costs tied to carbon and requiring changes in energy sourcing, investment, and workforce development. While some businesses may face short-term challenges, those that adapt quickly could find growth opportunities in clean energy and sustainable technologies. #sustainability #ghgemissions #co2reduction #esg #decarbonisation #co2 #emissions

Carbon reporting isn't just about compliance; it's a strategic advantage. While most focus on regulations, the real value lies in the unexpected business benefits it unlocks. From supply chain resilience to attracting ESG-aligned capital, here are 7 powerful reasons to invest in carbon transparency that most leaders overlook: 1.  Reveals Hidden Operational Inefficiencies: Carbon reporting uncovers energy and resource inefficiencies not obvious in financial reports, like outdated equipment, unoptimized logistics, or excessive travel that silently drain money. 2.  Strengthens Supply Chain Resilience: By requiring suppliers to provide emissions data, organisations indirectly force a cleaner, more transparent supply chain, reducing reliance on high-risk or non-compliant vendors. 3.  Improves Data Governance: Carbon reporting forces better data tracking, version control, and documentation across departments, improving broader data integrity beyond sustainability. 4.   Gives Leverage in Vendor Negotiations: Having detailed carbon data allows companies to challenge emissions-heavy suppliers, demand greener alternatives, or renegotiate contracts based on sustainability goals. 5.   Attracts Impact-Oriented Capital: Investors and funders increasingly use carbon transparency as a proxy for operational maturity, risk management, and alignment with ESG portfolios—even in emerging markets. 6.  Protects Against Future Carbon Price Shocks: Understanding your carbon profile early helps anticipate carbon taxes or border adjustment mechanisms that may suddenly hit high-emitting sectors with unexpected costs. 7.  Enhances B2B Sales Conversion: Large buyers now often require carbon disclosures from vendors. Being ready with trusted reports can be the difference between winning and losing B2B tenders. #Carbon #Reporting #Sustainability #Strategy #ESG #Leadership #Business #Resilience