While corporate disclosure on greenhouse gas (GHG) emissions is improving, reporting on Scope 1, 2 and 3 emissions is limited. Yet investors need reliable GHG emissions information to assess the climate risks facing their portfolio companies and to fulfill mandatory and voluntary regulatory requirements. This highlights the importance of having high-quality GHG emissions estimation models and accurate data to support investment decision-making.
Morningstar Sustainalytics’ Carbon Emission Data is designed to provide investors with powerful insights to assess and analyze companies’ GHG emissions.
Our Carbon Emissions Data is backed by best-in-class multi-factor regression models to estimate GHG emissions. With our sophisticated estimation models and high-quality data, investors can respond to regulatory requirements such as the EU Action Plan and disclosure expectations such as the TCFD and PRI. Our enhanced Carbon Emissions Portfolio Reports also provide rich insights into the portfolio-level performance on GHG emissions compared to a preferred benchmark.
Carbon Emissions Data by the Numbers
Best-in-Class Estimation Models
Our estimation models for Scope 1, 2 and 3 emissions follow a common model framework across all environmental metrics and considers subindustry, geographical location, and a company’s size. This common model framework facilitates consistency and comparability.
Our models also include specific factors, which offer the flexibility to adjust for structural differences in the underlying data and can address the limitations of data availability. The company activity data in our Scope 1 and 2 models allows the estimation models to account for subindustry variation in business models and GHG-generating activities.
|Multi-Metric Multi-Factor Model||Factor 1 (Subindustry)||Factor 2 (Size)||Factor 3 (Country)||Factor N-1||Factor N|
|Scope 1 emissions||✔||✔||✔||✖||✖|
|Scope 2 emissions||✔||✔||✔||✔||✖|
|Scope 3 emissions||✔||✔||✔||✔||✔|
|Common Factors||Refining Factors|
High-Quality Portfolio Analytics and Reporting Capabilities
Understand a company’s full emissions value chain with analysis on a portfolio’s Scope 1, 2 and 3 carbon intensity and footprint. Also, gain insights into how your company and sector allocation decisions are impacting the carbon intensity of your portfolio.
Best-in-Class Proprietary GHG Emissions Estimation Models
Mitigate your climate risks with more accurate emissions estimations that leverage models based on a company’s size, subindustry, business activities and geographical location.
Dedicated In-House Expertise
Benefit from a dedicated analyst team that verifies our robust GHG emissions research in real time. This allows for more accurate reported data than other machine learning driven applications.
Portfolio Analytics and Reporting
Identify and assess high-emitting companies within a portfolio to better understand your climate-related risks and opportunities. Investors can also leverage our carbon emissions data to demonstrate and analyze decarbonization trends over time.
Fulfill requirements for reporting initiatives, such as the TCFD, PRI, and the EU Action Plan. Our carbon emissions data can also be used as an input for stress testing.
Screen industry and subindustries and identify best-in-class companies. Establish maximum emissions thresholds.
Engagement and Voting
Identify and engage with high emitting companies. Set baseline emissions reduction targets and track improvements over time.
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
30 Years of ESG Expertise
800+ ESG research analysts across our global offices.
A Leading SPO Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Identify and manage investment risks and opportunities with climate research, ratings and data for investors.Learn More
Physical Climate Risk Metrics
Assess and disclose the direct and indirect physical climate risks of climate change related exposure.Learn More
Low Carbon Transition Ratings
Receive a forward-looking assessment of a company’s current alignment to a net-zero pathway.Learn More
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Capturing the Direct and Indirect Risks of Physical Climate Change in Investment Portfolios
Investors face a unique set of challenges in assessing the physical climate risks affecting their portfolio companies. In this blog discover the direct and indirect physical climate risks impacting companies and their supply chains.
A New Tool at the Table: Understanding Low Carbon Transition Risk By Industry and How Companies Are Managing It
Discover how leading companies are managing their low carbon transition risks. Using data from the Low Carbon Transition Ratings, we identify the industries with a large portion of the companies with strong management of transition issues and examine the factors contributing to their strong management scores.