Mirova and Robeco, founders of an initiative aiming to standardize the calculation of avoided emissions, have selected I Care by Bearing Point and Quantis to develop a global database of greenhouse gas (GHG) emission avoidance factors.

The initiative is supported by 10 founding partners, representing more than US$2 trillion of assets under management.

The database to be built by I Care by Bearing Point and Quantis will initially cover 80 specifically defined low-carbon solutions, for example, biomass energy, recycled plastic and low-carbon concrete.

The geographical differentiation of the reference scenarios taken into consideration for each solution and the various links in the value chains of these solutions will result in the creation of approximately 9,600 distinct avoidance factors during this first phase, which will end in Q4 2024.

The creation of a standardized and transparent database of avoidance factors should make it possible to quantify, compare and audit the emissions avoided by companies and projects, and thus encourage the redirection of financial flows towards assets that promote decarbonization, addressing for example the production of renewable energy, the electrification of transport, low-carbon property, but also recycling or the rare metals needed for the transition.

Each emission factor will contain details of the assumptions made, in particular:

• functional unit used
• carbon footprint of solution
• reference scenario used
• lifespan of solution
• time value of carbon
• rebound effect.

For all these parameters, precisely sourced default values will be provided and updated on an annual basis. The database, the companies note, will also allow for more detailed calculations depending on the level of access to the data.

Development of the database will commence in January 2024 and a first version will be made available to all stakeholders with a requirement to calculate avoided emissions, including companies, consultants, impact measurement software developers, financial institutions and data providers.

“This innovation will allow investors to better identify and value companies that contribute positively to the decarbonization of the economy and are, therefore, well positioned to create value in a world in transition,” says Guillaume Abel, deputy CEO of Mirova. “It will also facilitate the aggregation of the carbon footprint of delegated assets for our institutional clients.”