The Corporate Sustainability Reporting Directive requires large companies to report on their environmental and social risks, and on how their activities impact people and the environment.
The Corporate Sustainability Reporting Directive requires large companies to report on their environmental and social risks, and on how their activities impact people and the environment. The first companies will have to start reporting for the 2024 financial year in 2025.
Among the first to report are large financial institutions that - as a part of their CSRD disclosures - must disclose their scope 3 emissions, known as financed emissions.
This means that the institutions need to calculate how much GHG emissions they are accountable for through their investments - for example via bonds or equity in listed companies.
On the face of it, calculating financed emissions is a straight-forward exercise. There are multiple guidelines and a standard (PCAF) regulating how it must be done, but in i practice, it can be a very difficult exercise without the right data and tools.Take for example large banks, brokers and trading platforms, that invest their clients assets in stocks, bonds and funds. In order to calculate their financed emissions, they must first obtain a PCAF compliant dataset that produces GHG scope 1, 2 and 3 emissions on issuer-level with robust estimation models for non-reporting companies.
The key is to cover the vast majority of the weight of the investable universe. If a bank offers its clients hundreds of funds, that could mean thousands or tens of thousands of underlying companies that they need emissions data on. Second, the task of breaking-down fund codes into their constituent holdings is no simple exercise. This needs to be done for all funds in the investable universe, and requires a powerful analytics platform that can match fund look-up and look-through, with efficient processing of issuers IDs (e.g. ISIN codes) to ensure proper calculation of exposure weights across thousands of individual issuers, that may be represented dozens or hundreds of times across several funds.
Matters platform offer users a tool for calculating financed emissions on large universes of mixed assets, including corporate equity, bonds, sovereign bonds, ETFs, etc. All you need to do is upload a list of ISINs, and let our powerful analytics platform and GHG dataset deliver the needed output for you.
We maintain full transparency into the weight and instances of observations of single issuers across your portfolio or universe. And if you want to run the same exercise on e.g. reported EU Taxonomy alignment of your constituents, a few clicks will reconfigure the flow for you and provide the output you need. CSRD has received criticism for being difficult to comply with, which is understandable given the complexity that financial institutions face in getting just scope 3 emissions reporting right. Depending on the industry, CSRD requires reporting across hundreds of various metrics, but few require as much rigour as scope 3 GHG emissions.
At Matter, we are ready to help reduce the friction of calculating financed emissions or scope 3 calculations for your CSRD reporting. Get in touch to learn how we might be able to help your organisation.
Publication Details
Author: Emil Stigsgaard Fuglsang
Date: November 12, 2024
The Corporate Sustainability Reporting Directive requires large companies to report on their environmental and social risks, and on how their activities impact people and the environment. The first companies will have to start reporting for the 2024 financial year in 2025.
Among the first to report are large financial institutions that - as a part of their CSRD disclosures - must disclose their scope 3 emissions, known as financed emissions.
This means that the institutions need to calculate how much GHG emissions they are accountable for through their investments - for example via bonds or equity in listed companies.
On the face of it, calculating financed emissions is a straight-forward exercise. There are multiple guidelines and a standard (PCAF) regulating how it must be done, but in i practice, it can be a very difficult exercise without the right data and tools.Take for example large banks, brokers and trading platforms, that invest their clients assets in stocks, bonds and funds. In order to calculate their financed emissions, they must first obtain a PCAF compliant dataset that produces GHG scope 1, 2 and 3 emissions on issuer-level with robust estimation models for non-reporting companies.
The key is to cover the vast majority of the weight of the investable universe. If a bank offers its clients hundreds of funds, that could mean thousands or tens of thousands of underlying companies that they need emissions data on. Second, the task of breaking-down fund codes into their constituent holdings is no simple exercise. This needs to be done for all funds in the investable universe, and requires a powerful analytics platform that can match fund look-up and look-through, with efficient processing of issuers IDs (e.g. ISIN codes) to ensure proper calculation of exposure weights across thousands of individual issuers, that may be represented dozens or hundreds of times across several funds.
Matters platform offer users a tool for calculating financed emissions on large universes of mixed assets, including corporate equity, bonds, sovereign bonds, ETFs, etc. All you need to do is upload a list of ISINs, and let our powerful analytics platform and GHG dataset deliver the needed output for you.
We maintain full transparency into the weight and instances of observations of single issuers across your portfolio or universe. And if you want to run the same exercise on e.g. reported EU Taxonomy alignment of your constituents, a few clicks will reconfigure the flow for you and provide the output you need. CSRD has received criticism for being difficult to comply with, which is understandable given the complexity that financial institutions face in getting just scope 3 emissions reporting right. Depending on the industry, CSRD requires reporting across hundreds of various metrics, but few require as much rigour as scope 3 GHG emissions.
At Matter, we are ready to help reduce the friction of calculating financed emissions or scope 3 calculations for your CSRD reporting. Get in touch to learn how we might be able to help your organisation.
Publication Details
Author: Emil Stigsgaard Fuglsang
Date: November 12, 2024
