Find proxies & benchmarks of climate impacts & risks for infrastructure assets and portfolios.
Do you have your "Climate Comps"?
Knowing the climate impacts and risks of infrastructure investments is challenging and costly, but TCFD allows investors to use proxies and encourages benchmarking.
With infraMetrics climate proxies (or "Comps"), investors can approximate the climate impact of their assets using analytics customised to fit them the most: by activity, technology, size and more. With climate benchmarks, investors can gauge their own assets against the average level of climate impacts and risks of the relevant sector or segment.
infraMetrics® uses a combination of reported data, physical models and statistical techniques to produce robust, PCAF-aligned climate impact and risk metrics for hundreds of individual assets: enough to build robust proxies and benchmarks of climate risks, including:
- Climate impact proxies: carbon footprint (Scope 1, 2 & 3) and emissions per unit of revenue.
- Transition risk proxies: funded emissions, EBITDA-at-risk, Extreme Climate Value (scenario-based)
- Climate impact and risk benchmarks from the climate impact of the infra300® index, to customised benchmarks to compare assets and portfolio to the relevant reference.
What about Physical Risks?
Physical risks are unique to individual locations and cannot be averaged across assets to build proxies or benchmarks.
However, infraMetrics includes high-precision data for the physical risks to which hundreds of individual assets are exposed. Some of them may be in your portfolio. This data uses sub-asset level GIS data, high-resolution hasard models and asset specific vulnerability functions that can tell the difference an asset being 1% to 100% destroyed.
The team is equipped to produce custom physical risk analyses for individual assets as long as they can be precisely located and described.
When it is the case, we produce a 99% VaR for flood, cyclone and storms as well as expected business interruptions due to extreme temperatures for any asset type (TICCS activity class) anywhere in the world.
Do you have your "Climate Comps"?
Knowing the climate impacts and risks of infrastructure investments is challenging and costly, but TCFD allows investors to use proxies and encourages benchmarking.
With infraMetrics climate proxies (or "Comps"), investors can approximate the climate impact of their assets using analytics customised to fit them the most: by activity, technology, size and more. With climate benchmarks, investors can gauge their own assets against the average level of climate impacts and risks of the relevant sector or segment.
infraMetrics® uses a combination of reported data, physical models and statistical techniques to produce robust, PCAF-aligned climate impact and risk metrics for hundreds of individual assets: enough to build robust proxies and benchmarks of climate risks, including:
- Climate impact proxies: carbon footprint (Scope 1, 2 & 3) and emissions per unit of revenue.
- Transition risk proxies: funded emissions, EBITDA-at-risk, Extreme Climate Value (scenario-based)
- Climate impact and risk benchmarks from the climate impact of the infra300® index, to customised benchmarks to compare assets and portfolio to the relevant reference.
High model fit: Baseline reported and predicted Scope 1 emissions in transportation infrastructure globally.
Our Approach
To measure and value climate impacts and risks at the asset level for the infraMetrics reference dataset of hundreds of infrastructure companies in all major infrastructure sectors, we follow these steps:
- We first measure baseline (today) climate impacts and risks for hundreds of individual assets tracked in infraMetrics. This includes scopes 1,2 and 3 emissions and the risk of damages from floods, storm and cyclones.
- Starting from this baseline, we value the asset-level financial losses due to either transition or physical risks in different climate scenarios at the 2030, 2040 and 2050 horizons. This includes orderly and disorderly transitions and a "no transition" scenario.
- Using these results, we create the ability for investors to build “Climate Comps”with this data to proxy their asset carbon footprint and also access benchmarks for their portfolio in terms of climate risk exposure, including for the purpose of TCFD reporting.
The Global GHG Accounting and Reporting Standard was developed by the Partnership for Carbon Accounting Financials (PCAF) and recognises that at least for a transitional period there may be data and methodological challenges. In the absence of high granularity data, it encourages the use of estimated or proxy data to measure GHG emissions. To ensure that disclosures are accurate, complete, consistent and transparent, PCAF requires the use of data quality scores as the quality of data can vary depending on assumptions. With score 1 being the best to score 5 being the worst.
The Carbon Estimation models developed for infraMetrics have an average score of 2.8
What about physical risks?
Physical risks are unique to individual locations and cannot be averaged across assets to build proxies or benchmarks.
However, infraMetrics includes high-precision data for the physical risks to which hundreds of individual assets are exposed. Some of them may be in your portfolio. This data uses sub-asset level GIS data, high-resolution hasard models and asset specific vulnerability functions that can tell the difference an asset being 1% to 100% destroyed.
The team is equipped to produce custom physical risk analyses for individual assets as long as they can be precisely located and described.
When it is the case, we produce a 99% VaR for flood, cyclone and storms as well as expected business interruptions due to extreme temperatures for any asset type (TICCS activity class) anywhere in the world.
Assessing physical risks in infrastructure assets at the sub-asset level
To estimate the baseline damage of a given flood event for an infrastructure asset, highly granular sub-asset level GIS data is used to assess the impact of a flood (here 100-year event) with a 30x30m resolution. The resulting flooding is converted into physical damage using a specific damage function for this asset type (sources from the engineering literature) and the result is converted into a financial value on the basis of the total asset book value today. A 99% Physical VaR and expected loss can also be computed.
Extreme Climate Value: what difference do climate scenarios make?
Different climate pathways will impact asset prices: transition risks increase future costs and discount rates through lower profits and higher interest rates. Physical risks reduce future revenues and increase capex and opex, as well as increase discount rates through the leverage channel.
To measure the potential impact of climate change on asset prices, we use country-level macro-economic scenarios for an orderly, disorderly or absent transition to a low carbon economy as depicted by NGFS (other scenarios are available).
In each scenario, for each infrastructure asset tracked in infraMetrics, we project future financials (total assets, revenues, opex, profits, leverage, etc) as function of the chosen macro-economic scenario, taking into account the impact of carbon prices and the footprint of each asset and of physical risks as they are expected to evolve given the exposure of each asset.
On this basis, we reassess future dividends and discount rates (the risk premier in particular is modelled as a function of key financials) and obtain different asset prices in each scenario. We can then compute asset-level and aggregated results for:
- Extreme Transition Risk: difference in asset value between disorderly and orderly scenarios
- Extreme Physical Risk: difference in asset value within the no transition scenario with and without physical risk exposures for each asset.
A Comprehensive Climate Impacts and Risks Reporting Solution using Proxies and Benchmarks
| Climate Impact Measures | Unit | Horizons | Scenarios | Asset/Portfolio proxies | Benchmarks |
| Financed Emissions - Equity | tCO2/Market Cap | Today, 2030, 2040, 2050 | Orderly transition, Delayed transition, No transition | √ | √ |
| Financed Emissions - EVIC | tCO2/EVIC | √ | √ | ||
| Scope 1, 2, 3 emissions | tCO2 | √ | √ |
| Climate Risk Measures | Unit | Horizon | Scenarios | Asset/Portfolio proxies | Benchmarks |
| Emission intensity of Revenues | tCO2/$M Revenues | Today, 2030, 2040, 2050 | Orderly transition, Delayed transition, No transition | √ | √ |
| Ebitda at Risk (shadow carbon price) | % Ebidta | √ | √ | ||
| Transition Risk Extreme Value | % Loss | by 2030, 2040, 2050 | √ | √ |
New in infraMetrics!
The first-ever market-level climate risk benchmarks
All our infraMetrics indices are now available with climate impact and risk metrics including emissions per dollar of revenue and dollar invested.
Climate Comps & asset-level data
With hundreds of assets covered and granular TICCS filters infraMetrics allows creating "Climate Comps" for benchmarking the risks of individual assets and portfolios.
