Scientific Beta

Risk.net: "But green investors say the Evic measure jumps around too much – and for the wrong reasons – impeding efforts to gauge a company’s actual progress in reducing emissions. Businesses with an accelerating market value will see their carbon intensity fall quickly, regardless of their true credentials in the field. “What you get is a metric driven by the market performance of companies, as opposed to their climate performance,” says Frederic Ducoulombier, ESG director at Scientific Beta, a provider of quantitative indexes."

Risk.net 17/11/2021

"(...) But green investors say the Evic measure jumps around too much – and for the wrong reasons – impeding efforts to gauge a company’s actual progress in reducing emissions. Businesses with an accelerating market value will see their carbon intensity fall quickly, regardless of their true credentials in the field. “What you get is a metric driven by the market performance of companies, as opposed to their climate performance,” says Frederic Ducoulombier, ESG director at Scientific Beta, a provider of quantitative indexes. (...) Ducoulombier found that nearly a third of companies that improved Evic-based scores by 7% or more after applying the adjustment had nonetheless increased emissions. For revenue-scaling, the cadre of firms that improved by this degree was 18%. (...) But could the problems with using Evic be resolved? Scientific Beta advocates a return to revenue-scaling for metrics used in portfolio construction. “It’s not perfect, but it’s better,” says Ducoulombier. (...)"