Financial institutions worldwide are facing mounting pressure from clients, regulators, and other stakeholders to account for the greenhouse gas (GHG) emissions related to their finance and investment activities. Many are making bold commitments to reduce these so-called “financed emissions” in line with global climate targets. But without highly granular and recent emissions data on individual investments and assets, making those commitments a reality has presented a monumental challenge.
Climate TRACE, a global non-profit coalition, and Joint Impact Model (JIM) Foundation, a non-profit foundation under Dutch law, are working together to provide a solution. Together, the two organizations are bringing greater transparency to GHG emissions globally and the financial mechanisms enabling the world’s largest individual sources of emissions. Their collaboration will leverage Climate TRACE’s satellite and remote sensing data to examine the GHG impacts of individual assets financed by commercial banks and other asset managers.
Why are Climate TRACE and the JIM Foundation collaborating?
Climate TRACE harnesses satellite imagery and other forms of remote sensing, artificial intelligence, and collective data science expertise to track human-caused GHG emissions with unparalleled granularity and comprehensiveness. They have created an innovative, open, and accessible global emissions inventory that covers every country, every major sector, and even individual emitting sources like cargo ships, power plants, and factories.
Established in May of 2022, the JIM Foundation manages open-access online models to facilitate the disclosure and comparability of financed emissions by banks and investors.
"This collaboration will further the radical transparency brought about by Climate TRACE’s approach. While the coalition tracks and reports on the owners of the biggest emitting assets globally, we now intend to spotlight who is financing those asset owners," says Alex MacGillivray Executive Director of JIM Foundation. "The best way of doing that is by triangulating JIM’s financed emissions at the country and sector levels with Climate TRACE source-level data and public domain financial data."
What will this collaboration entail?
The collaboration between Climate TRACE and JIM Foundation will explore the possibilities for financial institutions to harness the power of Climate TRACE data. Through the collaboration we will seek to answer three questions:
1. How can we link current financiers and the emissions they are indirectly supporting via Climate TRACE data?
Our objective is to investigate the impact of both international and domestic finance on emissions. This research will yield insights into the role of finance in contributing to emissions from individual assets and explore strategies for transitioning to more sustainable financing practices.
2. How can GHG estimation models take advantage of recent breakthroughs in satellite data?
We will cross-reference our calculations, performed with tools like JIM and others, with the Climate TRACE database to enhance the accuracy of our findings.
3. Can satellite data and AI reduce the resources typically needed for GHG data collection?
We will explore the utility of Climate TRACE data by piloting the gathering of information on financial investments and for monitoring progress in transition and decarbonization strategies. Once decarbonization measures are implemented, can their impact be observed from space? Can AI be used to fill data gaps, for example emissions from micro and small enterprises in developing countries?
In the collaboration, JIM Foundation will leverage emission and asset-ownership details of identified locations and facilities from the Climate TRACE database. Working jointly with the JIM Foundation, Climate TRACE will help fine-tune JIM's emission factors using Climate TRACE data for specific countries and sectors.
“Our work is all about shining a light on the ‘where,’ ‘who,’ and ‘when’ behind climate pollution, because leaving this information in the dark would make it nearly impossible to take targeted climate action,” said Gavin McCormick, executive director of WattTime and co-founder of Climate TRACE. “This partnership with JIM foundation will add an important layer of transparency to the issue of asset financing, so the world understands more about what’s driving the climate crisis and so banks, investors, and others can have the information they need to mitigate risk and reduce their financed emissions.”
This partnership between Climate TRACE and JIM Foundation highlights the importance of collaboration and transparency in addressing climate change. By utilizing our respective expertise and resources, we will work towards creating a more sustainable future for all.