Managers launch platform to harmonise assessment of climate solutions’ impact

A group of asset managers has announced the official launch of a platform intended to help investors credibly quantify the impact of companies facilitating decarbonisation.

The launch of the Avoided Emissions Platform (AEP) comes as asset owners increasingly seek to incorporate climate solution investments into their asset allocation. This week, a local government pension fund investment pool launched a £500m fund targeting such opportunities, citing “tailwinds for climate solutions”. 

The logic behind climate solutions investments is that a successful energy transition necessitates not only a shift away from carbon-intensive activities but the availability of decarbonised or lower-carbon alternatives.

“However, until now, there has been a lack of transparent, quantified data to support the comparison of these alternatives and to redirect financial flows toward companies facilitating decarbonisation,” the developers of the AEP platform said in their announcement.

The AEP is intended to fix this problem by modelling the avoided emission factors for 65 climate solutions, based on a transparent and open access methodology.

Asset owners like the Environment Agency Pension Fund in the UK have called for “a unified framework for avoided emissions“ as a way to create a level playing field to fairly compare companies and the actions they are taking to transition their businesses to more sustainable models.

‘Critical step’

Edmond de Rothschild AM, Mirova and Robeco have been pivotal in the development of the platform, which also has the support of corporates and a group of data providers. Railpen, PGGM and Smart Pension were among the institutional investors that put their name to the call for expressions of interest for database developers in 2023. 

This resulted in the selection of I Care and Quantis to create the avoided emission factors. An independent scientific committee has provided recommendations to the initiative to ensure consistency with existing guidance on avoided emissions, also sometimes referred to as Scope 4 emissions.

“This platform establishes robust and harmonised approaches to calculate avoided emissions, enabling both companies and financial institutions to assess climate contributions with greater clarity,” said Anne Désérable, managing director at Quantis.

“It’s a critical step toward a more transparent and effective transition.”

Lucian Peppelenbos, climate and biodiversity strategist at Robeco, said the platform would help address “the high demand from our clients for more extensive impact measurement”.

Manuel Coeslier, lead expert, climate and environment at Mirova, said: “Clear and comprehensive information on companies’ true contributions […] is essential, notably through the provision of climate solutions.

“We are confident the Avoided Emissions Platform will soon establish itself as a global market platform, thus enhancing ambition and transparency in measuring avoided emissions.”

Pension funds will be able to access the platform directly via a licence fee and/or indirectly via their asset managers and/or data providers.

“In the case of direct access, the platform has been intentionally priced with affordability in mind so that the cost is not a significant barrier to its broader use,” said Emily Homer, climate and biodiversity specialist at Robeco. 

The launch of the AEP comes as Mirova is working on an initiative to develop an index aimed at enabling a holistic assessment of companies’ decarbonisation efforts. A call for expressions of interest to create the index, billed as the Corporate Climate Contribution Index, closes tomorrow.

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