Attribution Analysis of Equity Portfolio Emissions: Examining and Integrating Existing Frameworks

Understanding the drivers influencing the greenhouse gas emissions associated with financial portfolios is crucial for constructing and monitoring a consistent climate investment strategy. Several frameworks have emerged in recent years to perform attribution analyses and aim to identify the drivers behind portfolio decarbonization over time. This article offers a comparative analysis of existing frameworks, exploring the key drivers identified and the methods employed to isolate their effects. Building on this review, a flexible three-step model is formalized to integrate these drivers, and five specific models are developed to address climate-related questions. These models should help investors to better understand the drivers behind portfolio emissions metrics changes and distinguish the exogenous drivers over which they have limited control from those over which they can exert direct influence.