Measure Risks and Opportunities
The environmental transition is already on its way and will keep on changing the rules of the game worldwide. The induced shift in risks and opportunities is impacting finance: hard times are to come for environmentally blind players. So you need to know if an activity will be favoured in the future due to its alignment with the environmental transition, or if it may be handicapped and risky due to its obstructions to societies’ environmental goals. The NEC provides a clear score for this transition risk based on climate-related issues and other environmental impacts, when significant.
Implement smart investment strategies
The motivation for integrating climate or environmental impacts can be multiple: get strategic insight for environmental impacts, achieve positive impact for the next generations, avoid stranded assets, avoid greenwashing or drive green transitioning. Whatever your goals, the NEC can help you to set specific, measurable and time-based environmental objectives (elements of SMART goals). NEC score can be used to set investment strategies in several ways at business, company, portfolio or any level of group of assets:
+ As a static threshold, for example a minimum NEC score of 0% for each issuer within a portfolio or an average NEC of more than 20%
+ A transitioning objective for businesses, companies, funds, asset managers or asset owners, for example the overall NEC score should grow by 1% every year, or investees should demonstrate a credible trajectory to increase their NEC of more than given % within five years, etc.
Engage and get support
As a member or partner of the NEC Initiative, you will pro-actively contribute to improving transition risk measurement and business model alignment with the environmental transition by engaging in dialog with investees. Through this collaboration, you will also gain valuable insights for your sustainability and transitioning efforts by connecting with like-minded professionals who share their methods, data and encouragement.
Gain in reporting clarity and transparency