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.

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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.

Emissions are modelled using activity-specific approaches (TICCS subclass) in order to use predictors that are the most relevant to each asset type and activity e.g., temperature variance (shown below). Other factors include traffic, size, design (shape), etc.
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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:

  1. 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.
  2. 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.
  3. 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.

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.

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Florida, USA, April 2023

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.

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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:

  1. Extreme Transition Risk: difference in asset value between disorderly and orderly scenarios
  2. 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

Using the rich database of emissions and financial data available in infraMetrics at the asset level, it is possible to build proxies and benchmarks for any infrastructure investment for the purpose of reporting climate impacts and risks.
Available climate impact metrics
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
Available climate risk metrics
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.

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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.

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Benchmarking Carbon Emissions

Methodology: Estimating emissions in transportation infrastructure using machine learning 

Presented by Fabien Nugier, Ph.D.

Using infraMetrics® to benchmark carbon intensity & transition risks for all infrastructure assets

Presented by Darwin Marcelo & Fabien Nugier

Request an infraMetrics demonstration 

Contact our team to schedule a demo of the most advanced infrastructure investment analytics platform.

Granular Data

Several hundreds segments of valuation risk metrics are available covering geographies, sectors, styles and business risk profiles.

Rich Analytics

Each index family includes dozens of analytics describing the risk profile and structure of each index

Monthly Updates

All infraMetrics index families are updated quarterly on the 10th working day of the month.