This module is designed to assess the greenhouse gas (GHG) emissions generated by your investments which are called financed emissions (scope 3.15).
1. Why Consider Financed Emissions?
Financed emissions represent the greenhouse gas emissions associated with investments, lending, and other financial services. They are a crucial component of a financial institution's carbon footprint, often representing the largest source of emissions impact.
Even with a minority stake in the asset, the investor needs to include the asset’s financed emissions in its GHG assessment.
2. Investment Types
2.1 For the simple module
The investment types covered by this module are:
Equity (listed and unlisted)
Corporate bonds
Business loans.
If you invest in another asset type or if you do fund of fund investment, you should refer to your Climate Expert that will guide you to another adapted module.
2.2 For the advanced module
The investment types covered by this module are:
Project Finance
Sovereign debt
Motor vehicle loan
Indirect investments (fund of fund investments)
A specific tab in the template must be completed for each asset type.
3. Data Required
3.1 For the simple module
Name of the Asset [MANDATORY]
Outstanding amount [MANDATORY]
Asset value [MANDATORY]
Result of latest GHG assessment [ONE OF THE FOLLOWING 3 OPTIONS IS MANDATORY]
If Result of latest GHG assessment is not available, NACE code, Country of operation and Revenue of the company
If Revenue is not available, NACE code, Country of operation and Number of employees of the company
3.2 For the advanced module
Project Finance
Name of the Project [MANDATORY]
Outstanding amount [MANDATORY]
Project financing value [MANDATORY]
Result of latest GHG assessment [ONE OF THE FOLLOWING OPTIONS IS MANDATORY]
If Result of latest GHG assessment is not available, Country of operation and Energy produced/Energy consumed/Revenue of the project
Motor vehicle loan
Loan Label [MANDATORY]
Outstanding loan amount [MANDATORY]
Total vehicle value [MANDATORY]
Type of engine (Thermal, Hybrid, Electric) [MANDATORY]
Actual fuel consumption and fuel efficiency of the vehicle
If Actual fuel consumption is not available, actual annual distance or location and fuel efficiency of the vehicle
Sovereign debt
Country of debt issue [MANDATORY]
Year of investment [MANDATORY]
Book value of debt held [MANDATORY]
Indirect investments
Name of the Asset [MANDATORY]
% ownership in the fund [MANDATORY]
Result of latest GHG assessment [ONE OF THE FOLLOWING 3 OPTIONS IS MANDATORY]
If Result of latest GHG assessment is not available, NACE code, Country of operation and Revenue of the company
If Revenue is not available, NACE code, Country of operation and Number of employees of the company
4. Calculation method
4.1 For the simple module
Financed emissions are calculated using this core formula:
Financed Emissions = Attribution Factor × Emissions of Asset
Here's how each component works:
Attribution Factor: This represents your ownership share of the asset. It's calculated by dividing your outstanding amount by the asset's total value. It must be inferior to 1.
Emissions of the Asset: These can be determined through several methods, in order of precision:
Using the company's verified GHG assessment
Using the company's unverified GHG assessment
Estimating based on the company's revenue, sector, and country using EXIOBASE coefficients. For estimation using EXIOBASE, the calculation takes into account both direct emissions within the sector and indirect emissions from upstream sectors, including those occurring abroad.
The methodology follows the Partnership for Carbon Accounting Financials (PCAF) standard, which has been validated by the GHG Protocol.
4.2 Advanced module : Project Finance
Financed emissions are calculated using this core formula:
Financed Emissions = Attribution Factor × Emissions of Project
Here's how each component works:
Attribution Factor: This represents your ownership share of the asset. It's calculated by dividing your outstanding amount by the asset's total value. It must be inferior to 1.
Emissions of the Project: These can be determined through several methods, in order of precision:
Using the project’s verified GHG assessment
Using the project’s unverified GHG assessment
Estimating based on the project’s physical activities such as energy production or consumption.
Estimating based on the project’s economic activities such as project’s revenue and year of investment
4.2 Advanced module : Motor vehicle loan
Financed emissions are calculated using this core formula:
Financed Emissions = Attribution Factor × Emissions of Vehicle
Here's how each component works:
Attribution Factor: The attribution factor is calculated by dividing the Outstanding Loan Amount by the Total value of vehicle at acquisition. It must be less than 1.
Vehicle’s Emissions: These can be determined through several methods, in order of precision:
Using the vehicle’s actual emissions
Estimating based on the vehicle’s actual fuel/energy consumed and distance travelled
Estimating based on the vehicle’s model, year, engine type and city using averages and local/regional statistical data
The methodology follows the Partnership for Carbon Accounting Financials (PCAF) standard, which has been validated by the GHG Protocol.
4.3 Advanced module : Sovereign debt
For sovereign bonds, the calculation method for financed emissions follows this approach:
Financed Emissions = Attribution Factor × Country’s Emissions
Here's how each component works:
Attribution Factor: The attribution factor is calculated by dividing the Outstanding Amount by the GDP adjusted by PPP (Purchasing Power Parity). It must be inferior to 1.
Country’s Emissions: These can be determined through several methods, in order of precision:
Using territorial emissions divided by adjusted GDP (widely available and regularly updated)
Using consumption-based emissions divided by adjusted GDP (more precise but less available)
The methodology follows the Partnership for Carbon Accounting Financials (PCAF) standard, which has been validated by the GHG Protocol.
4.4 Advanced module : Indirect investments
The calculation method for financed emissions follows this approach:
Financed Emissions = Attribution Factor × Investment’s Emissions
Here's how each component works:
Attribution Factor: This represents your ownership share of the asset. It's the percentage of ownership of the invested fund by the investor. It must be less than 1.
Country’s Emissions: These can be determined through several methods, in order of precision:
Using the company's verified GHG assessment
Using the company's unverified GHG assessment
Estimating based on the company's revenue, sector, and country using EXIOBASE coefficients. For estimation using EXIOBASE, the calculation takes into account both direct emissions within the sector and indirect emissions from upstream sectors, including those occurring abroad.
The methodology follows the Partnership for Carbon Accounting Financials (PCAF) standard, which has been validated by the GHG Protocol.
5. Upload your data
To complete the module, go to Data > Data collection > Investment and follow the steps below:
Download the data collection template as an Excel file or a Google sheet, by clicking on « Import a file ».
Please follow the process written in the "READ ME" tab of the file to fill the mandatory columns correctly. This is necessary for the import to function properly.
Upload your completed template onto the module. For the simple module, the calculation will be made automatically on the platform. For the advanced module, a Greenly analyst will take over to compute the related carbon emissions and import the results.
6. Results
The Results page offers a clear and detailed view of the financed emissions by sector, portfolio, and other insightful analytics.
If you want to check the calculation methodology details for each asset, you can go to the Data Upload page and click on the Methodology button:
