Portfolio Analytics Suite

Financial Institutions are quickly recognizing their contribution to global greenhouse gas emissions and stepping up in the fight against climate change. They recognize that climate change presents significant financial and physical risks along with the possibility of increased volatility in the future. As the ESG reporting and regulatory landscape heats up, stakeholders are increasingly pushing for disclosure of climate change characteristics of investments alongside financial metrics. This requires accurate and up to date insights on the climate impact of investment activities.

The Persefoni team has combined its breadth and depth of sustainability expertise with shared insight from leading financial services institutions to build a product tailored to your specific needs.

With this depth of experience, Persefoni built the Portfolio Analytics Suite to provide banks, private market investors, insurance companies, and asset managers with carbon insights for better decision-making.  Persefoni’s Portfolio Analytics Suite, which includes seven new dashboards, as well as Portfolio Index Benchmarking and Climate Impact Benchmarking, gives you a deep dive into carbon insights to integrate into your investment strategy and improve financed emissions. You can visualize potential decarbonization pathways, conduct climate due diligence, model value at risk, compare estimates to actuals, construct low-carbon portfolios, and more.  

Seven new dashboards within the Persefoni Portfolio Analytics Suite include:

• Portfolio Analysis - Understanding and reporting on key metrics is crucial to success. This dashboard calculates metrics for investor regulations and industry-specific reporting (emissions intensity, WACI, and weighted average data quality). Create custom reports and export key visualizations that align with your organization’s needs by filtering insights by fund/portfolio, asset class, emissions by scope, industry, data quality, and time frame.

• Value at Risk from Transition - It is a TCFD requirement to account for risk from climate change; this dashboard allows users to account for risk associated with the transitional impacts of climate change across their funds and portfolios. Users can model companies’ revenue and EBITDA against risks based on consumer preference changes and the cost of carbon pricing. 

• Portfolio Decarbonization - Decarbonization is the most important part of meeting net zero targets; Portfolio Decarbonization allows users to model decarbonization over six decarbonization scenarios: 1) divestment, 2) active reduction of emissions, 3) changes in sector allocation, 4) addition of low-carbon companies, 5) investments in climate impact, 6) purchase of offsets. This dashboard gives users the confidence to make and measure their net zero commitments and understand the implications of doing so.

• Actuals vs. Estimates - When investors create a climate change strategy, their financed emissions calculations are based on a mix of actual reported and estimated footprints. This dashboard will offer a comparison of Persefoni estimates for the same companies that report actual emissions so users can understand the difference. Estimates vs. actuals also allow comparison between different estimation methods. 

• Portfolio Builder - Investors recognize the fundraising opportunities in creating low-carbon funds, but lack the tools to model, backtest, and construct portfolios that attract investor capital. This dashboard enables investors to construct a model portfolio based on sector and weight to understand the projected carbon emissions and take an existing portfolio (whether the investor’s or an index), and apply carbon-related filters to test screening for a low-carbon fund.

• Carbon-Adjusted Return Analysis - To make progress against decarbonization goals, investors need to incorporate carbon emissions into the investment diligence and underwriting process. This dashboard allows users to better understand the carbon impacts of their investment returns. Using existing revenue and EBITDA projections, combined with carbon revenue at risk, carbon pricing, and decarbonization costs, this analysis tool brings a carbon perspective to IRR/MOIC return scenarios. 

• Side-by-Side Comparison - This functionality allows users to better understand why their financed emissions differ between funds, companies, or year over year. By allowing users to make comparisons between organizations or between year-over-year changes for a single organization. 
  

  

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After performing your climate risk assessment, make the most of your footprint by putting company and fund emissions into context by benchmarking. With the Climate Impact Benchmarking module, see how portfolio companies’ emissions stack up against competitors by extracting insights on their total footprint, scope breakdown, and emissions intensity. Then,  broaden your analysis to an industry level using the Portfolio Impact Benchmarking module to see how your fund-by-fund carbon footprint compares to popular equity and fixed-income indices like S&P 500, Russell 2000, and more.  

Financial institutions play an important role in the transition to a low-carbon economy, and the time is now to move from tactical to strategic carbon management. Moving beyond basic carbon accounting and disclosure, firms must prioritize committing to a decarbonization strategy and pursuing reduction mechanisms. This involves incorporating climate change into due diligence and cost of carbon analysis, raising capital for low-carbon funds, and producing TCFD reports to showcase progress. Overwhelmed by the journey ahead? No need to be, as our industry-leading carbon accountants and financial services experts have developed Persefoni to meet your needs and help you drive towards net zero.