What is Finance-Grade Emissions Data?

by | Jan 25, 2022 | GLYNTBlog

Everyone wants better carbon emissions data, and there is a lot of confusion around very similar sounding terms: Investment-grade data, finance-grade data, financed emissions and reportable data. If we cut through the word cloud, what’s really going on? To get started, a quick google search “finance-grade emissions data” does not produce a definition. So while, we hear that term a lot, but it lacks precision and shared meaning. So in this blog post we’ll look at data needs to derive a working definition. Here’s our take on what “finance-grade” emissions data should be:

Avoid Greenwashing:

For most companies, the hot-button issue is data of sufficient quality to avoid the charge of “greenwashing.” Many forecasters predict that 2022 the year in which investors start discriminating between guess-estimates and verifiable data.

Showcase Actual Reductions:

One quick way to determine the quality of your data: Can you show emissions reductions year over year? If you’re using industry averages and guess-estimates, there won’t be a basis for showing reductions. You’ll be stuck. Do you really want to re-report a prior year to show reductions? Nope! The time to move off of industry-averages is now.

Auditable:

If investors and financiers are going to use your data, they will want it audited.Your data system should have a clear path from data sources to reported data across the board. The auditors will ask to sample sources and output to check the quality of the data processing. If you’re typing data into spreadsheets, there will be errors and bad judgment calls. How much time do you really want to spend on re-working data in an audit? Zero.

Reportable:

When the CEO and CFO have to sign off on emissions reports, the quality of data processing should be at the same level as other financial data. There is no free pass for sustainability data, the senior team is still on the hook.

Shareable:

How will you share your emissions data? We’re seeing burdensome survey requests, intrusive requests for financials, and so on. To get financing, you’ll need to share your data. But how? And which bits?

Accurate and Usable:

And even before you get into financing, your team will need analysis and planning. The data must be ready to go in a format you can use. You own the emissions journey, you need data to support your key role.

That’s it! Not a tall list! 

If you need finance-grade emissions data, get in touch with GLYNT. We produce it every day. 

Get Started with GLYNT 

And PS. “Financed Emissions” sounds similar to finance-grade emissions data but really has a different meaning. In the financial sector the hot-button issue is the loan portfolio. Are loans being made to companies who have high carbon emissions per unit of revenue? In particular, are loans being made to producers or users of fossil fuels? The unit of measure for this conversation is financed emissions, eg the carbon intensity of the loan portfolio as a whole. To learn more, see the materials from the leading trade organization for sustainable lenders PACF.