The Paris Financial Center presents its methodological guide for assessing companies’ carbon transition performance

In conjunction with COP 29, the Institut de la Finance Durable has published its guide to analyzing companies’ carbon transition performance. 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 analyzing climate transition plans. It is intended for analysts in the financial sector and for companies as part of the development and management of their carbon transition strategies.

The objectives of the fight against climate change presuppose the achievement of an industrial revolution and the in-depth transformation of the economic system. As far as the financial sector is concerned, the central objective is to allocate resources to the most efficient and effective companies in achieving their decarbonization transition. To achieve this, a company’s carbon performance must be assessed with the same robustness as its financial performance. Chaired by Yves Perrier, Chairman of the Institut de la Finance Durable, and Philippe Setbon, Chairman of the Association Française de la Gestion Financière (AFG), the work to draw up the guide drew on the collective expertise of the Paris financial marketplace. The financial analysis community, professional federations and associations from all economic and financial sectors, regulators, advisory services and climate transition experts have all worked together to build this reference tool. The guide contributes to the definition of a common frame of reference enabling a consistent approach to assessing the performance of companies in implementing their transition plans. The guide sets out, in a synthetic and pedagogical manner, the key stages and indicators in assessing the carbon performance of companies. It proposes a series of analytical approaches that can be based on data communicated within the framework of the CSRD, in order to assess :

• the company’s carbon performance in the light of its past results, and put into perspective with the performance of comparable companies ;
• the robustness of the company’s transition plan, notably through the ambition of the commitment trajectory, the financial resources mobilized and the ability to deliver ;
• the governance mechanisms put in place within the company as part of its carbon transition.

‘The financial sector has a major role to play in achieving the ecological transition by efficiently allocating capital to finance the required investments. This guide to analyzing transition strategies is an essential element in contributing to a homogeneous approach to analysis methods on the part of financial players. In this way, a market discipline for measuring environmental impact will gradually emerge, complementing the financial market discipline, ‘ declared Yves Perrier, Chairman of the Institut de la Finance Durable. This guide to analyzing the environmental performance of companies is a major step forward. The result of a collective effort by all the players in the marketplace (investors, banks, companies and climate experts), it is a major element in the creation of shared analysis standards, and thus strengthens the consideration of environmental impact in the evaluation of companies. The Paris financial center is thus confirming its position as a leader in the management of the climate transition,’ declared Philippe Setbon, Chairman of the AFG.