Circularity contributes to private markets guidance on avoided emissions from WBCSD

Circularity Capital, a specialist European growth stage investor in the circular economy, has supported a groundbreaking initiative from the World Business Council for Sustainable Development (WBCSD) and Deloitte to produce the first guidance for private markets on the calculation and reporting of ‘avoided emissions’. As a key contributor to the initiative, Circularity Capital has provided insight from its leading environmental impact reporting function, drawing from its portfolio of businesses operating in the circular economy.

Avoided emissions refer to the greenhouse gas emissions that have been 'avoided' by using a specific product or service, compared to business-as-usual  had the product or service not been used. Avoided emissions differ from corporate greenhouse gas inventories ( scope 1, 2 and 3), in that they allow solutions to be compared at product level, rather than corporate level only. . Understanding the avoided emissions of existing and upcoming solutions is increasingly recognised as a key tool for investors  assessing decarbonisation solutions.

Jamie Butterworth, founding partner of Circularity Capital, said: “This report comes at a crucial time in the maturity of the global impact investment industry. As a growing number of investors pursue decarbonisation strategies, the concept of avoided emissions, and the ability to compare the carbon impact of solutions versus ‘business as usual’, presents an increasingly attractive tool for investors.

“At the same time, however, a lack of transparency and consistency around how such impact is calculated risks undermining the usefulness of this data and potentially the industry’s credibility. We believe therefore that developing a robust framework for avoided emissions reporting is key to maximise positive environmental impact and institutional investor capital flows. It is for this reason that we are delighted to have supported WBCSD and Deloitte in developing this guidance for private markets investors”.

The report provides practical guidelines for investors to assess the credibility of avoided emissions claims as well as how to substantiate and evidence environmental impact. It was created in collaboration with the Glasgow Financial Alliance for Net Zero (GFANZ), Partnership for Carbon Acounting Financials (PCAF), Circularity Capital and GX League, and supported by Deloitte.

To read to the report, visit www.wbcsd.org/Imperatives/Climate-Action/Resources/Accelerating-decarbonization-by-aligning-the-efforts-of-business-and-finance.