Nysnø launches report on avoided emissions accounting

How can we measure climate impact? Today, Nysnø launches a report on how we can shape a methodology for accounting of avoided greenhouse gas emissions.

Investors are increasingly dedicated to reducing emissions, and in the future, avoided emissions will become a key metric that will have financial implications and will be used to measure the performance of companies. Article 2.1c in the UNFCCC Paris Agreement addresses the need to make finance flow consistent with climate goals, and to make this happen we need to invest in the best climate solutions.

“We believe that in the near future, investors and companies will be more and more valued for their contribution to the reduction of global emissions. The establishment of a standard methodology for carbon accounting will contribute to channeling capital towards investment with a climate impact”, says Nysnø Climate Investments CEO, Siri Kalvig.

For investors to quantify the climate impact of early investments, there is a need for a common method for carbon accounting, especially forward-looking avoided emissions accounting. Several initiatives have been launched to establish such frameworks.

“The accounting of avoided emissions is a complex topic. Our methodology is a first step aiming at identifying the main challenges and rooting some principles. There are many questions left to be answered and we are working tight with our ecosystem to address them in a systematic and consensual way”, says Director Climate Technology in Nysnø, Jean-Baptiste Curien.

Since 2021, Nysnø has been part of Project Frame which is convened by the Prime Coalition. Project Frame is a coalition of investors dedicated to the establishment of a methodological framework for the accounting of forward-looking emissions. The coalition has over 600 individual members and 370 organizations, including 120 venture capital and private equity investors representing $60 billion in raised investments dedicated to climate and $200 billion in assets under management.

“When we, as investors, consider an investment, we calculate financial returns based on expected future cash flows and risk. Our goal is to encourage the global investment community to adopt a similar mindset for climate impact. To achieve this, we need to have a standardized methodology that can measure the climate impact based on expected future carbon flows. This will enable us to compare and prioritize projects that provide the greatest benefit to the environment”, says Curien.

Read the full report “How to measure climate impact? Shaping a methodology for the accounting of avoided GHG emissions” here: Nysnø (nysnoinvest.no)