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The investment grade carbon rating system

CARBON RATING SYSTEM

For sophisticated investors seeking to improve risk adjusted returns to gain competitive advantage

Institutional investors face over $10 trillion in unpriced climate risks. Investors can use Emmi to provide clarity on climate risk and improve risk adjusted returns by managing both downside risk & upside opportunities. By effectively managing carbon risk, revenue and costs can be better controlled - improving performance and avoiding significant downside events.

5 Risk Drivers

Directly connected to climate and carbon are impacting investments in the short and long term. From increases in legal cases and regulation to shifts in supply & demand and consumer preferences to physical damage from severe weather events.

Legal

01

More legal cases being brought around climate, creates director risk

Chevron, Exxon Mobil, Kingdom of the Netherlands (Urgenda), Australian Government, REST Superannuation

COST RISK

LIABILITY RISK

Regulatory

02

Increased carbon and climate regulations

Stress tests of assets, carbon pricing, climate disclosure requirements by Central Banks.

COST RISK

Market

03

Shifts in supply & demand to lower carbon products

Increased cost of high carbon raw materials, low emissions technology disruption, repricing and stranding of assets

COST RISK

REVENUE RISK

Reputation

04

Shift in consumer preferences

Stigmatisation of sector, negative stakeholder feedback, workforce management issues

COST RISK

REVENUE RISK

Physical

05

Damage to assets from increased severity of extreme weather events

Inundation from sea level rise, more severe droughts, more severe bushfires = inability to insure or finance

COST RISK

REVENUE RISK

WHO IS EMMI FOR?

Investors seeking to reallocate capital now to avoid step change climate risk repricing.

Climate risks will become highly correlated, overnight step change repricing events are highly probable. Investors who don't reallocate capital leave themselves exposed to mass impairment and liquidity events.

01

Asset Owners

Helping superannuation & wealth funds improve investment decisions with consistent carbon risk evaluation and engagement tools, to model across entire asset classes to construct competitive portfolios that maintain their targeted risk-adjusted returns as long term stewards of capital

02

Asset Managers

Market leading investors seeking competitive advantage, thoroughly and simply evaluate carbon risk, verified data, adjustable models, create consistency across investments

03

Banks & Insurers

Simply incorporate accurately calculated carbon risk into liability decision making to improve returns and accurately manage risk positions

04

Companies

For high performance organisations who’re seeking to reduce financial costs, improve investor relations and proactively manage carbon risks to stay ahead

FUTURE OPPORTUNITIES & RISKS

Emmi’s customers maintain or gain competitive advantage as the world transitions to a low carbon economy.

On a clear and consistent digital platform companies can efficiently manage future opportunity & risk strategies, not just report on past results.

The Emmi score follows market known metrics similar to how credit ratings work.

1000 - 600

(AAA - BBB)

Limited financial exposure to climate and carbon risks

600 - 200

(BB+ to B-)

Partial financial exposure to climate and carbon risks

200 - 0

(CCC+ to D)

Material financial exposure to climate and carbon risks

The Score

Easily understand the true financial exposure to climate change so capital

can be reallocated to manage that risk and improve investment outcomes

480

ABSOLUTE
SCORE

c

d

TRANSITION RISK

PHYSICAL

RISK

EMISSION

TREND

THE CARBON RATING TOOL

Emmi accurately grades carbon risk by embedding climate science into financial metrics on a digital platform

Emmi tracks absolute risk against the scientifically agreed global carbon budget.

02

01

Absolute Risk

By tracking absolute risk against scientifically agreed carbon budgets Emmi provides much more robust metrics compared to relative "best of class" analysis.

02

Rating Breakdown

Absolute rating and detailed breakdown is produced for each company, in a browser-based digital platform for deeper analysis, management and reporting accessible to interested parties.

03

Carbon Risk

Emmi will illuminate the reliance companies have to carbon emissions across multiple financial drivers. As the world transitions to a low carbon economy this granularity on carbon risk will become ever more important.

More than 100 climate finance metrics over 6 performance areas

Using verified, objective data across 6 performance areas an absolute rating and detailed breakdown is produced for each investment.

Governance

04

How well is the company's governance structure setup to be able to recognise and respond to the risks and opportunities climate change presents.

Strategy & Targets

05

How robust and complete are a company's strategy and targets around carbon emissions and climate change.

Communication

06

How well is the company communicating its climate risk performance to all relevant stakeholders.

Value to Carbon

01

How reliant is the long term value creation of the company to carbon emissions.

Leverage to Carbon

02

How sensitive is the company's debt position to carbon emissions.

Liquidity to Carbon

03

How well can a company's short term assets absorb a carbon price should it be adequately priced.

CARBON RATING SYSTEM

Organisations can take control of their carbon risk position, improve investor confidence and transparency to improve financial outcomes.

Consolidate and compare risk and opportunities across a portfolio of investments, with analytics & ratings based on objective data - investors can easily understand carbon risks of each investment.

Rank and screen investments from 0 to 1000 (similar D through to AAA credit ratings), understand carbon risk characteristics and monitor ongoing risk profile. Accurately benchmark investments to optimise your portfolio, risk spread and financial outcomes. Investors save time while improving ability report/manage investments.

Emmi transparently assesses granular, verifiable physical and transition risks, translated into financial benchmarks which investments can be evaluated against in real-time.

Every company is rated based on publicly available, verified data with full traceability to produce a consistent company rating. Using the Emmi platform companies can access full breakdowns, diagnostics, update data in real-time to improve accuracy of their score and underlying risk factors.

Each transaction is traceable & verifiable, access can be granted to investors, banks & insurers to further improve transparency to gain market advantage.

With standardised, verified and climate science integrated ratings & diagnostics, investors can spend more time making decisions with confidence.

MORE THAN 100 SPECIFIC CLIMATE METRICS

TRANSITION TO A LOW CARBON ECONOMY

Companies can move more rapidly towards low carbon footprints and avoid divestment

The Emmi platform enables companies to openly and objectively manage and convey their strategy to reduce carbon risk to improve access to finance, insurance and cheaper capital. With verification against progress, full supply chain (scope 1, 2 & 3) capability and real-time updates companies can analyse and optimise in meaningful ways

Team

Michael Lebbon