Climate Impact Assessment
In 2020, Y Analytics pioneered the Carbon Yield metric, a measure of greenhouse gas emissions averted per $100 of capital invested. The Carbon Yield is grounded in the principles of the Impact Multiple of Money (IMM) and tailored to the climate context. It estimates the additional, differentiated, net emissions reduction attributable to a company. While it is the core decision tool of our climate impact methodology, the IMM is used to supplement it when other environmental and social impact pathways are present.
What differentiates our approach?
From diligence to exit, our approach has a deeply rigorous underpinning with real world applications.
Further adapted to the climate context, the Carbon Yield methodology rests on the following key principles:
Our Methodology is Tailored to the Climate Technology Context
Additionality
We adjust for the additionality a company provides, based on the markets it operates in, number of direct competitors, and role of regulation in its sector.
Net impact
The methodology also focuses only on net company impact - meaning we will subtract out any emissions generated by a company's operations above the counterfactual from the
Carbon Yield calculation.
Holistic Impact
The methodology allows for different social and environmental impact to be captured beyond emissions, such as water, health, biodiversity impacts.
Tailored energy usage emissions factors
When companies use or produce electricity, we apply context-specific energy emissions factors depending on the product or technology.
Risk adjustments
All company outputs are risk-adjusted using a consistent set of risk discount rubrics, to account for differences in technological viability and the likelihood of impact realization from the company's products.
Multiple time horizons and longevity
When non-CO2 greenhouse gases are averted, we calculate Carbon Yield using both GWP100 (100-year) and GWP20 (20-year) conversion factors, to account for the different warming potentials of GHGs. We anchor on GWP20 recognizing the criticality of the next decades in avoiding tipping points.
When a company builds long-lasting, durable products with a long expected useful lifetime, we attribute a portion of those long-term impacts in the year the products are produced.
