Data Incident

Errors were found and corrected for the ingestion of EVIC & Net Assets from Factset. The impact of this error was seen across 1/3 of the Emmi universe, in particular the temperature alignment calculations were affected, showing higher than expected temperature alignment.

As part of resolving this issue, we have made a number of notable improvements to the temperature alignment algorithm to help provide more accurate results.

Temperature Alignment algorithm updates

Emissions reductions data calculations consider all 3 emissions scopes for the purposes of temperature alignment. These reductions are now no longer capped at 0, allowing a negative carbon reduction to be offset by other scope increases/decreases (i.e. one scope being “under budget” can offset another scope that is “over budget”). This provides the most accurate understanding of what temperature this company is aligned to.

For carbon budget metrics, total reductions is now calculated using tonnes of reduction across all scopes, which better reflects company’s real reductions. Previously we had used scope weighted average, which applied a weighted average reduction percentage across all three scopes.

The 5 carbon budget metrics that are used for temperature alignment are aggregated together at the global equivalent level (removes errors with averaging percentages and metrics offset each other more effectively).

• Earnings to emissions

• Assets to emissions

• Market Cap to emissions

• EVIC to emissions

• Net Assets to emissions

We’ve adjusted scope factors for 1,2 & 3 based on the latest 2022 data set. These factors are used to fairly judge a company/asset’s emissions across all scopes against global carbon budgets. Given these global carbon budgets are budgets for scope 1, global scope 2 is less than global scope 1 and double counting is known to exist within scope 3, scaling factors are required. The major scope factor change is for Scope 3 which is now 0.13 of Scope 1, to account for double counting.