Carbon Score® Axylia
For several years now, there has been much talk about CO2 emissions and climate change, and companies themselves have been quick to publish figures and data, using calculation methods and analysis criteria that are not always very clear. This situation is a source of confusion for investors wishing to invest responsibly, as well as for individuals who want to know more.
Faced with this lack of clarity and simplicity, we came up with the idea of creating the Axylia Carbon Score®.
Methodology
The Axylia Carbon Score® assesses, on a scale from A to F, a company's ability to pay its carbon bill and stabilise it over time. It tells investors and individuals whether the company is truly profitable and responsible, after accounting for the cost of the CO2 it emits.
When a company is not sufficiently transparent or does not disclose all of its emissions, we do not assign it a rating (ND).
Concretely, we first establish the real carbon bill of a company, using a unique calculation method which takes into account all of its CO2 emissions, including its indirect emissions (Scope 3), unfairly hidden in the traditional estimations. We thus integrate the extraction of raw materials, the recycling of the product, but also the transport or the subcontractors.
We then convert the number of tonnes of CO2 obtained into euros, according to the price calculated by leading international experts, in order to establish the overall cost of the company's emissions… which we then compare to its operating income.
Axylia's Carbon Score® is a dynamic tool, that is to say it takes into account the efforts made by a company to reduce its CO2 emissions. A company that takes concrete and ambitious measures to reduce its absolute emissions will be improved.
More and more players in the financial sector and individuals are expecting a commitment from companies in the fight against global warming consequences. Axylia's Carbon Score® is a simple, efficient and reliable tool to guide them and help them make the right decisions.
Axylia calculated the Carbon Score® of the 600 largest European stock market capitalisations using carbon data provided by the global specialist Trucost (Standard & Poor's group).
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Calculation of the Carbon Score® in 5 steps :
1.
CO2 emissions are computed from Trucost data*, integrating all scopes, including scope 3, which represents on average 80% of a company's emissions.
2.
These CO2 emissions are then multiplied by the cost of carbon published by the IPCC, i.e. €148/tonne.
This gives us the carbon bill.
3.
This carbon bill is deducted from the company's EBITDA**.
This is referred to as the "carbon-adjusted" EBITDA.
4.
This carbon bill is deducted from the company's EBITDA**.
This is referred to as the "carbon-adjusted" EBITDA.
5.
The "carbon adjusted" EBITDA is compared to the EBITDA in order to determine the company's carbon risk.
It ranges from A to F to give the Axylia Carbon Score.
When a company is not transparent enough or does not disclose its full emissions, we do not give it a score (ND).
* Trucost: a pioneer in researching and calculating the carbon footprint of companies, a subsidiary of Standard and Poor's
** EBITDA: operating profit (Earnings Before Interests, Taxes, Depreciations and Amortizations)
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