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Emissions and Algorithm Update: September 2023

Summary of what you need to know

This is a minor platform update including several improvements:

  • The full universe of 46,000 unique public companies are now available for 2022 (Double the 23,000 companies previously available and gap filled with previous emissions).

  • Minor improvements in modelling created a larger dynamic range and a net change of +5% in Scope 1, -5% in Scope 2 and +15% in Scope 3 estimates for 2022. Median estimates are lower than before.

    • We improved use of historical reported data and increased model stability

    • ASX300 portfolio has smaller changes than the full universe.

  • Decrease in overall universe size to ~46,000 due to moving from duplicate ISINs to EntityID (56,000 unique companies since 2018)


Emmi coverage and prediction quality

  • We have improved our emissions modelling compared to CDP and sustainability reports by ~2-5% from our March 2023 release due to Improved use of historical reported data where available.

  • Fora typical portfolio, Dynamic range has increased (smaller low numbers, larger big numbers). in Scope 1 (+5%), Scope 2 decreased 12% and Scope 3 decreased 4%. The medians have decreased by ~5% (Table 1)

  • Emmi coverage has decreased slightly from 49,829 to 48,052 companies globally due to the removal of duplicate ISINs and our conversion to EntityID.

  • CY 2022 coverage has increased 96% to 46,088 public entities, up from 23,948 in March.

  • Improved model stability within the Emmi emissions modelling framework.

Temperature, Capital Loss and Reductions Algorithm Changes

  • There have been no fundamental changes to the Temperature Alignment, Capital Loss and Reductions requirements algorithms since the data update in May 2023.

  • However these metrics see decreases between 3-10%, in line with the lower median Scope estimates.

What does it mean for your portfolio?

  • For a typical medium-large cap portfolio (eg the ASX300), our improved emissions predictions are slightly different but are relatively compared to the previous estimates.

  • For financed emissions, you should expect roughly the same portfolio footprint (including Scope 1+2),

  • For portfolio level carbon liabilities that include Scope 3, expect slightly lower carbon liabilities.

Table 1: Percent Difference between Old and New Datasets (2022: 46,000 companies)

Figure 1: Top 20 ASX Companies 2021

ASX Scope 1 Comparison, 2021

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