A framework to assess portfolio companies' ambitions and capabilities for a multinational investment company
Equipping financial services for Net Zero readiness
As companies embrace the need to reduce emissions, decarbonization is becoming a tangible driver of value. Those who understand how to decarbonize quickly and at low cost stand to benefit in the long-run. Investors are aware of this, but what’s less obvious is how to assess if companies have the right level of ambition, the right capabilities and the right tools to deliver on Net Zero.
Grappling with this understanding, a large, international asset manager needed an approach and tools to assess and engage with companies in understanding their Net Zero readiness.
WHAT WE DID
Through a combination of our project experience, subject matter expertise and a market research deep dive into 5 sectors and over 30 companies, we gathered a series of indicators that inform a company’s level of Net Zero readiness and built a Net Zero delivery framework around those.
We also defined common gaps and shortcomings in well-recognized sustainability standards and disclosures and outlined where additional engagement is needed to gain deeper insights into how well a company is managing the decarbonization transition.
By sharing our Net Zero readiness framework, we equipped the asset manager with a targeted approach to assessing the Net Zero readiness of their investment portfolio. By knowing what to look for and how to engage with companies on topics related to sustainability and Net Zero, the asset manager can make better-informed decisions that will help them maximize returns and support decarbonization efforts.
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