Carbon Confidence in Climate Finance
Launched in 2015, CarbonCount is a proprietary scoring tool created by Hannon Armstrong for evaluating investments in U.S. based renewable energy, energy efficiency, and climate resilience projects to determine the efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent (CO2e) emissions.
This first-of-its-kind methodology promotes transparency in project finance by creating a simple and comparable metric for infrastructure projects to be evaluated in terms of how much the capital investment is mitigating climate change. For example, the graphic below illustrates how a project in the Midwest would likely receive a higher CarbonCount score than a project in California because the grid avoided emissions factor is higher in the Midwest.
By incorporating current emissions and power generation data validated by third parties, CarbonCount gives investors and portfolio managers a critical avoided carbon emissions metric for the downstream impacts of their investments, which extend far beyond the operational carbon footprint of a company, and drives much-needed disclosure around financed emissions that exacerbate climate change.
With corporate climate leaders now embracing stronger transparency and goal setting around total carbon emissions across Scopes 1, 2 and 3, CarbonCount offers unparalleled insights into the Scope 3 emissions of the capital investments a particular company is making. For financial companies like Hannon Armstrong, the Scope 3 emissions associated with capital investments typically have a significantly larger impact on the global emissions trajectory as compared the financial firm’s operational emissions captured in Scope 1 and 2 reporting.
How the Scoring Works
Indicative CarbonCount by
Impact of capacity factor and cost per MW
Indicative CarbonCount for an Identical Sample
Wind Project in Different Regions
Impact of grid fuel mix
The Value of CarbonCount Reporting
Comparable: Provides an intentionally simplified solution to a complex problem that results in a concise and comparable metric of avoided carbon emissions
Transparent: Gives investors and stakeholders transparency about the true cost and potential impact of clean energy and infrastructure investments
Accountable: Promotes accountability by removing the ambiguity of what is implied by the words “green” and “sustainable”
Capital Allocation: Encourages allocation of capital to building and energy infrastructure projects that are the most impact for mitigating climate change
Investors need to measure the efficiency with which capital is reducing climate change, which is why we use CarbonCount’s straightforward ratio to measure the GHG reduction per dollar of investment. The concept is simple: if carbon counts and capital is scarce, we ought to prioritize the most impactful investments for mitigating climate change.
Jeffrey W. Eckel
Chairman and Chief Executive Officer