Artificial Intelligence: Now AI Can Estimate A Company’s Emissions

https://dailyalts.com/wp-content/uploads/2021/09/climate-4806446_640.jpg

Most companies that file financial statements do not disclose their greenhouse gas emissions (GHG).

Evaluation of companies’ carbon footprint is essential for countries to be able to meet their 2050 decarbonization targets for 2050 as per the Paris Agreement. For investors, the quantum of greenhouse gases (GHG) emitted by a company could be an important factor to evaluate its suitability in a portfolio geared towards positive climate actions in the context of ESG. While most companies do not yet formally disclose their emission data, AI can now reasonably estimate this crucial metric. (VentureBeat)

Companies to be climate-accountable

“Merely 2.27% of companies filing financial statements are disclosing their [greenhouse gas] emissions according to our environmental, social, and governance (ESG) datasets,” write co-authors You Han, Achintya Gopal, Liwen Ouyang, and Aaron Key in a research paper titled Estimation of Corporate Greenhouse Gas Emissions via Machine Learning. The authors are researchers at Bloomberg Quant Research and Amazon Web Services.

“In order to make a meaningful change, we need to measure who is contributing [greenhouse gases] into the atmosphere and monitor their claims to decarbonize.”

The researchers have developed and trained an AI algorithm to estimate a non-reporting company’s GHG.

How it works

They trained the model on data relating to disclosed emissions, from datasets containing company financials such as balance sheets and income statements, corporate locations, and ESG records. The ESG records contained a wealth of data such as carbon emissions and resource and energy use; human rights and diversity and inclusion; and criteria based on management structure, executive compensation, and employee relations.

The model, when tested, estimated well the GHG emissions of companies in industries including health care, technology, financial, materials, real estate, utilities, energy, and communications.

“Our model provides accurate estimates of corporate GHG emissions to investors such that they are able to align their investments with the regulatory measures and achieve net-zero goals,” write the authors of the study.

Related Story: Fidelity Launches Sustainable Climate Solutions Fund

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2021/11/hand-plus-btc-plus-india-colors.png
Digital Assets: India To Clamp Down On Cryptocurrencies Via Legislation By Year-End
November 24, 2021     Digital Assets, Latest News, News

The legislative agenda for the upcoming winter session of the Lok Sabha, the lower house of India’s parliament, shows that a bill titled “The Cryptocurrency and Regulation of Official Digital…

https://dailyalts.com/wp-content/uploads/2021/11/Klarna-HQ-in-Stockholm-scaled.jpg
FinTech: Klarna Launches “Pay Now” In The US, Klarna Card Soon To Follow
November 24, 2021     FinTech, News

Klarna, the Stockholm-headquartered fintech powerhouse last valued at $45.6 billion, has brought a “Pay Now” offering to consumers at retailers wherever Klarna is accepted. The company also announced a Klarna…

https://dailyalts.com/wp-content/uploads/2021/11/fb-default.b5dd38d9c4194731a32674e7e89fe658.jpg
Venture Capital: Agtech And Farmer-To-Farmer Platform FBN Raises $300M
November 24, 2021     ESG and Sustainability, News, Venture Capital

Farmers Business Network (FBN) is a farmer-to-farmer network launched in 2014 as an information source and for sharing of agronomic precision data. It now has thousands of farmer-members managing millions…

https://dailyalts.com/wp-content/uploads/2021/11/img13-2400.jpg
Venture Capital: Arc, Which Makes $300K Electric Boats, Snags $30M
November 24, 2021     News, Venture Capital

Arc, a startup led by former SpaceX engineers and developing electric boats, announced its $30 million Series A raise led by Greg Reichow, a former Tesla VP of Production, now…