Smart Innovators: Financed Emissions Management

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Executive Summary

As financial institutions pursue alignment with global sustainability commitments, they must undertake the complex task of managing financed emissions. Here, they face challenges around data collection, estimation and comparability, and scrutiny over greenwashing. In response, software providers are enhancing their capabilities in data management, analytics and decarbonization. Analysis of 15 leading vendors reveals innovations that provide more accurate data estimates and visualizations of portfolio decarbonization. This report will help financial institutions select the appropriate tools to integrate emissions data into their investment decisions, thus contributing to the objective of achieving net zero targets.

Table of contents

Vendors compete to support financed emissions management
The many hurdles of financed emissions management start with data collection and estimation
Introducing financed emissions management
Financed emissions management involves data capture through two core models
Financed emissions management hinges on three core capabilities
Innovators cover many asset classes, focus on data quality, and support portfolio analytics
Financed emissions management capabilities: five factors firms should consider

Table of figures

Figure 1. Lack of emissions data from third parties is a hindrance to climate initiatives
Figure 2. Two software categories support financed emissions management
Figure 3. The eight capabilities of financed emissions management, defined
Figure 4. Financed emissions management software providers: capabilities assessment
Figure 5. PCAF asset classes

About the authors

Adam Barnard

Principal Analyst

Adam is a Principal Analyst in the Verdantix Net Zero & Climate Risk practise. Prior to joining Verdantix, Adam was a Director at an environmentally focused US investment firm. Adam has previously held roles in London in investment management at Man Group, UBS and Morgan Stanley and in strategy at SABMiller in South Africa. Adam holds a Masters from Yale with a concentration on investment and the environment, a MBA with a concentration on impact investing and sustainability and a BCom(Honors) in Economics and Finance from the University of Cape Town

Ryan Skinner

Research Director, Net Zero & Climate Risk
Ryan is the Research Director for the Verdantix Net Zero & Climate Risk practice. He guides the research team to develop compelling research at the intersection of net zero strategies, carbon management, climate risk and technology. Prior to joining Verdantix, Ryan was a principal analyst at Forrester Research, where he initiated the research into ESG data and analytics offerings. He also has extensive experience of helping software companies with their messaging, positioning, market and technology strategies. Ryan studied at Duke University, the University of Manchester and the University of Oslo, and speaks Norwegian fluently.

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