The only comprehensive system
for measuring environmental impacts
The NEC is a user-friendly tool that measures the environmental impact of an economic activity, company or sector to deliver a net contribution value on a -100% to +100% scale. Designed to inform and empower investment decision makers, it uses physical data from across the whole value chain to provide a snapshot of an activity’s net environmental contribution and it can be applied at a company, portfolio, index or product/source level.
Over the course of four years (2015-2018), the NEC metric was developed and applied to more than 1,500 issuers, proving its capacity to provide investors with:
TOTAL OVERVIEW
The indicator is a single number calculated on a scale from -100%, for the most damaging activities, to +100% for the most ecological solutions, giving investors a clear picture of the total impact of a product/source, company, activity or sector.
CLEAR OPPORTUNITIES
The NEC metric can assist investors in identifying investment opportunities that are aligned with the energy and environmental transition.
WARNING RISKS
The NEC metric can identify the business models that are damaging to natural capital and/or could end up obsolete or seriously challenged by the environmental transition.
BEST SOLUTIONS
It can identify activities that are considered to be ecological solutions and show investors where to capture growth from transition opportunities.
One Score on a Clear Scale
The indicator attributes a single number calculated on a scale from -100%, for the most damaging activities, to +100% for clear environmental solutions that fulfill the same given function. This scale establishes an order of magnitude of the net impact, giving investors a full picture of the total impact of a product/source, company, activity or sector.
This is an example of the Mobility Framework:
The Value of the NEC Measurement Tool
A positive NEC indicator means an activity’s overall impact is better than the existing measured average and is thereby helping to reduce the environmental footprint of a function and contributing towards an environmentally resilient economy.
EXAMPLE
One example of the NEC’s application comes from Dong Energy, the Danish utility, formerly Orsted, that adopted a transformation plan in 2008, entitled “From Black to Green”. Its transformation included many divestments and an impressive investment plan, and as such, its NEC score moved from -16% in 2006 to +72% in 2018, and +92% in 2020.
COMPLETE
ANALYSIS
It goes beyond carbon to consider all of the environmental issues identified by the EU and UN: biodiversity, climate, air, water and waste.
TRANSPARENT
SYSTEM
It takes into account all of the transition risks and opportunities from products and services using a transparent process that anyone can employ.
BOTTOM-UP
APPROACH
Using bottom-up analysis, it starts with the entire value chain, narrows to products & services, and culminates with detailed analysis, activity by activity.
SCIENCE BASED
It calculates using quantifiable physical data from academic, peer-reviewed sources, third-party studies, certification schemes and similar environmental initiatives.
GLOBAL
The NEC has been tested for all geographies and all sectors and proven applicable across different asset classes (equity, bonds, real estate, infrastructure).
OPEN AND
COLLABORATIVE
It will continue to grow and evolve through a collaborative effort uniting thought leaders in the financial and commercial sectors.
Learn how the NEC metric works.
Join us
As a mission-led company (‘’entreprise à mission’’), the NEC Initiative brings together a collaborative community of organizations that are committed to integrating environmental risks and opportunities into their asset management strategies. We are welcoming members that are willing to contribute to shape the future of sustainable investing.
How to join