Research conducted by a team of researchers in Germany has found that carbon-emission measures suffer from data inconsistency. The researchers argue that investors who analyse financial risks from climate change depend entirely on firm-level emissions data.
When dealing with such data, they advise investors to pay close attention to the quality and constraints of the data they use. The paper investigates the Refinitiv ESG database between 2002-2020 and finds “1,425 cases where the stated Scope 1 and Scope 2 do not add up to the stated total emissions amount”.
The paper also includes a case study of AGL Energy, an Australian integrated energy company.
The paper’s key recommendation for investors is that “when using carbon data with other financial and economic indicators it is important to make sure that the data are synchronised as reports on carbon data tend to lack behind”.
