Climate Impact Methodology
The Carbon Yield metric, a measure of greenhouse gas emissions averted per dollar invested, is the core decision tool of our climate impact methodology. It estimates the additional, differentiated, net emissions reduction attributable to a company. Not only is Carbon Yield grounded in the principles of the Impact Multiple of Money (IMM), we also provide an IMM estimate for each deal.
Learn more in our Carbon Yield white paper.
Our Methodology is Tailored to the Climate Technology Context
Additionality
We adjust for the additionality a company provides, based on the markets it operates in, number of direct competitors, and role of regulation in its sector.
Net impact
The methodology also focuses only on net company impact - meaning we will subtract out any emissions generated by a company's operations above the counterfactual from the
Carbon Yield calculation.
Multiple time horizons
When non-CO2 greenhouse gases are averted, we calculate Carbon Yield using both GWP100
(100-year) and GWP20 (20-year) conversion factors, to account for the different warming potentials of GHGs. We anchor on GWP20 recognizing the criticality of the next decades in avoiding tipping points.
Tailored energy usage emissions factors
When companies use or produce electricity, we apply context-specific energy emissions factors depending on the product or technology.
Risk adjustments
All company outputs are risk-adjusted using a consistent set of risk discount rubrics, to account for differences in technological viability and the likelihood of impact realization from the company's products.
Longevity
Finally, when a company builds long-lasting, durable products with a long expected useful lifetime, we attribute a portion of those long-term impacts in the year the products are produced.