Authors
Valéry Lucas-Leclin & Sarbijt Nahal
This report by Société Générale offers investors a tool to assess potential carbon costs at sector and company levels, under a business as usual scenario. The extent to which carbon cost is already materially embedded into the revenues and earnings of companies is a crucial issue for investors, and as such, this report focuses on the downside risk to companies in a carbon constrained market.Using different assumptions, this report demonstrates how to assess the likely impact on a company's sales by valuing the carbon intensity of economic models, in this case calculated as g CO2 emitted / $ of sales generated. It is argued that such a measure of carbon intensity is a much more useful economic concept than carbon footprint.Ultimately, this model can be used by investors to optimise their investment portfolio against carbon constraints.