Carbon4 Finance selected by the Eurosystem to supply climate-change related investment data
- Carbon4 Finance chosen to provide the Eurosystem (i.e. the National Central Banks of the euro area and the European Central Bank (ECB)) with climate-related sustainable and responsible investment (SRI) data
- Deutsche Bundesbank acted as Lead Central Bank on behalf of all ESCB (European System of Central Banks) central banks in the procurement procedure and entered into a contract to use the data provided by Carbon4 Finance
- Carbon4 Finance assignment follows common stance agreed last year by the Eurosystem on climate change-related investment principles and disclosure on climate-related risks
Carbon4 Finance, a leading provider of climate- and biodiversity-related data for the financial community, announced today that it was chosen through a competitive selection process by Deutsche Bundesbank acting on behalf of all ESCB (European System of Central Banks) central banks for the supply, usage and disclosure of sustainable and responsible investment (SRI) data. Within this framework agreement, all central banks of the ESCB like the European Central Bank (ECB) and each of the 19 National Central Banks of the euro area forming the Eurosystem, are now given the opportunity to use Carbon4 Finance comprehensive data.
A key step in bringing to life the common stance adopted by the Eurosystem on climate-change
The assignment of Carbon4 Finance follows the announcement in 2021 of a common approach by the Eurosystem Central Banks to apply sustainable and responsible investment principles in the euro-denominated non-monetary policy portfolios that they each manage under their own responsibility. Within this common stance, the Eurosystem aims to start climate-related disclosures beginning of 2023 including the measurement and disclosure of greenhouse gas (GHG) emissions and other SRI metrics of these portfolios consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and potentially other portfolios in the future. By improving the awareness and understanding of climate-related risks, the common endeavor will help all Eurosystem members to contribute to the transition to a low-carbon economy and to EU climate goals.
Carbon4 Finance data enables to assess exposure of central banks assets
Carbone4 Finance provides data covering both physical risks caused by global warming and transition risks supported by assets as the world shifts to a low-carbon economy. It comprises data and/or methodologies on Scope 1, Scope 2 and Scope 3 GHG emissions, GHG intensity data, avoided emissions and forward-looking elements. These data allow to follow main economic sectors and issuer-types with data relating to securities/asset classes such as sovereign and sub-sovereign bonds, supranational and agency bonds, corporate bonds, covered bonds, green bonds and equity. Carbon4 Finance has a worldwide coverage with more than 124,000 ISINs and 8,000 entities.
A framework contract signed with Deutsche Bundesbank
Deutsche Bundesbank, which acted as Lead Central Bank during the procurement process entered into a contract with Carbon4 Finance and will be one of the first central banks that will obtain the data from Carbon4 Finance. All other ESCB central banks have the opportunity to join this framework agreement for using climate-related data from Carbon4 Finance for regulatory tasks and activities being necessary for the performance of its missions and responsibilities.
“The availability of comprehensive, consistent and timely data is the key to everything we do,” says Sabine Mauderer, the member of the Bundesbank’s Executive Board responsible for markets. “The better the data situation, the more targeted our actions can be.”
“From the very beginning, Carbon4 Finance's strategy has been to produce data that allow corporates, asset managers, banks to understand how the underlying assets in their portfolios are exposed to the risks of climate change, but also how they can contribute to the transition to a low carbon world. We follow rigorous scientific criteria and approaches, stemming from the Carbone 4 group's extensive experience in strategic consultancy and proven expertise in delivering leading-edge methodologies. At a time when the IPCC warns of irreversible impacts of global warming and increasing business and societal disruption, with an urgent call to action to the business community, we are delighted to see that the Eurosystem embraces this point of view.” said the partners of Carbone 4.
“Climate change is a challenge not just to the global economy and the societies but also to the financial system. To support the finance sector in rapidly and massively addressing climate issues, our mission is to provide financial institutions with relevant data to help them better integrate related risks in their portfolio strategy as well as in their reporting. We are happy to have been selected by the Deutsche Bundesbank as Lead Central Bank in this procurement procedure on behalf of the whole ESCB/Eurosystem. Our strong methodologies and data quality on transition and physical risks as well as our team expertise on the different sectors and on the different assets and green bonds were instrumental for this recognition.” added the partners..
The three partners of Carbone 4 are Alain Grandjean, Jean-Marc Jancovici and Laurent Morel.
 Euro-denominated non-monetary policy portfolios contain the assets held by Eurosystem central banks that are not related to monetary policy operations. They include euro-denominated investment portfolios and staff pension funds.
About Carbon4 Finance
Carbon4 Finance is part of Carbone 4, a Paris-based group comprising the first independent consultancy firm specialized in low-carbon strategy and adaptation to climate change.
Created in 2016, Carbon4 Finance provides institutional investors with comprehensive and reliable climate, carbon, and biodiversity data, in order to assess the risks and opportunities of their investment portfolios and build environmental investment strategies. Its clients are asset managers, asset owners, banks and index providers willing to report their climate and environmental performances or develop investment tools and policies based on custom data solutions.
Carbon4 Finance offers a complete analysis of climate and environmental risks:
• Carbon Impact Analytics (CIA) offers a bottom-up analysis that goes beyond sectoral analysis, enabling the identification of the climate-related best performing companies within each sector; it provides an exhaustive analysis of the carbon footprint, identifying both risks and opportunities, including the calculation of induced emissions and emissions savings (scope 1, 2 and scope 3 emissions upstream and downstream).
• Climate Risk Impact Screening (CRIS) is a method developed for financial service providers to assess the exposure of their asset portfolio to physical risks (heat waves, droughts, sea level rise, storms …) CRIS provides indicators that allow us to obtain several levels of detail on physical risks: from an overall assessment for reporting purposes to a detailed assessment to engage with underlying companies.
• Launched in 2021, Biodiversity Impact Analytics Database powered by the GBS® (BIA-GBS) is an integrated impact database that provides an overall and integrated vision of the biodiversity footprint at the issuer and portfolio level, considering the full value chains of the underlying companies.
For more information, visit www.carbon4finance.com
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