Analysis guide on how to assess carbon performance of companies

In conjunction with COP 29, the Institut de la Finance Durable is publishing its analysis guide on how to assess carbon performance of companies. Following the example of reference works on corporate financial analysis, this guide is intended as a tool describing the reference framework and best practices for analysing climate transition plans. It is intended for analysts in the financial sector and companies as they develop and manage their carbon transition strategies.

The primary mission of the financial sector in implementing the ecological transition is to allocate capital in line with the transition objectives. For this allocation to be relevant, it is essential to have a common reference framework. The concerted development of analytical approaches and key indicators, as occurred for financial analysis in the 1980s, is therefore needed.
The analysis guide from the Institut de la finance durable contributes to this, while capitalising on the emergence of reporting frameworks for corporate sustainability data, notably the CSRD in the European Union.
This document presents, in a pedagogical manner, the key steps in assessing a
company’s performance in terms of the carbon intensity of its activities, emissions reduction targets, the transition plan including dedicated financial resources and its governance mechanisms. It was produced within the IFD’s multi-stakeholder working group on the standardisation of non-financial analysis, chaired by Philippe Setbon, President of the French Asset Management Association (AFG). The drafting of this guide involved the communities of financial analysts, professional federations and associations, regulators, advisory services and climate transition experts, through the group’s work or via interviews.
We hope that this guide, as a reference for the financial ecosystem, will help define the foundations of a common language and therefore contribute to the emergence of a new market discipline on climate. However, it is only the first step in a longer process of achieving data maturity and producing the methodologies needed for analysis. Standardisation efforts must therefore continue, and the IFD will remain mobilised in contributing to this effort.