The energy transition requires not only moving away from carbon activities but also proposing decarbonised alternatives. Although these are mostly known, there is no global, quantified data available to compare them and support redirection of financial flows to companies enabling the decarbonization. Estimates of the investment required to meet global net-zero emissions by 2050 range from USD 109- 275 trillion. A large portion of this investment will be in so-called “climate solutions”, such as renewable power generation, electrified transportation and green buildings. Whilst investment is needed across the board, the incremental contribution of the investment to the low-carbon transition is dependent on the location and the type of the investment. More and more companies now communicate their scope 1, or direct, GHG emissions and we see an increase in the amount of data about estimated indirect emissions, scope 2, and scope 3. Metrics are needed, however, to identify their respective contribution to the global net zero objective and compare solutions. One such measure is avoided emissions, sometimes referred to as “scope 4”. Unlike induced emissions that benefit from strong methodological bases, avoided emissions are calculated in a variable manner by different companies, which jeopardizes their credibility and prevent their use at scale. This was recognized recently by the G7 who called for the private sector to work together to develop an international standard. That is why today, a group of financial institutions, spearheaded by Mirova and Robeco, come together through a call for expressions of interest to enable:

• The creation of a globally accessible common database of avoidance factors (Batch 1).
• The estimation of emissions avoided by companies over a wide investment universe of listed companies first, resulting from the application of the avoidance factor database on the activity data of the companies concerned (Batch 2).

The new datasets should be based on the following principles:

• Full life cycle analysis as well as an attribution of avoided emissions across the entire value chain.
• Precautionary principle with the least advantageous baseline scenario being selected to calculate avoidance factors.
• Transparency and access: the methodology for calculation of avoidance factors should be transparent.