Climate TRACE, developed by a coalition of NGOs, tech companies, and universities, is an advanced tool designed to monitor and track global greenhouse gas emissions. Utilising satellite data, machine learning, and AI, the tool provides high-resolution, near-real-time insights into emissions across various sectors and regions. This enables finance professionals to assess the environmental impacts of their investments accurately.

Methodology and approach

Climate TRACE’s methodology leverages multiple data sources, including satellite observations, remote sensing technologies, and ground-based measurements. These data are processed through advanced AI algorithms to estimate emissions with high accuracy. The approach is comprehensive, covering sectors such as power generation, transportation, industrial activities, and land use.

• Data collection: The tool collects data from a variety of sources, including satellites, aerial observations, and ground sensors. This extensive data collection ensures comprehensive coverage of emissions across the globe.
• Data processing: Using machine learning algorithms, the collected data is processed to identify and quantify emissions from different sources. This processing involves the integration of multiple datasets to enhance the accuracy and reliability of the emissions estimates.
• Verification and validation: The emissions data is verified and validated through a combination of ground-truthing and cross-referencing with existing emissions inventories. This step ensures the credibility and precision of the emissions data provided by Climate TRACE.

Benefits for finance professionals

Climate TRACE offers several key benefits for finance professionals

• Enhanced ESG integration: By providing detailed emissions data, the tool helps finance professionals integrate environmental, social, and governance (ESG) factors into their investment analysis and decision-making processes. This enhances the overall sustainability and responsibility of their investment portfolios.
• Risk assessment: Accurate emissions data allows finance professionals to assess the environmental risks associated with their investments. Understanding these risks can lead to better-informed decisions, mitigating potential financial losses due to environmental liabilities.
• Regulatory compliance: As regulations surrounding emissions and environmental impact become stricter, Climate TRACE provides the necessary data to ensure compliance with local and international environmental standards.
• Transparency and reporting: The tool aids in improving the transparency of emissions reporting, enabling finance professionals to provide stakeholders with reliable and verifiable emissions data. This can enhance the credibility and reputation of their organisations.

Conclusion

Climate TRACE is a powerful tool for tracking and analysing global greenhouse gas emissions. Developed by a coalition of leading organisations, it utilises cutting-edge technology to provide accurate, real-time emissions data. Finance professionals can leverage this tool to enhance ESG integration, assess environmental risks, ensure regulatory compliance, and improve transparency in their reporting processes. With its comprehensive methodology and approach, Climate TRACE is an invaluable resource for advancing sustainability in financial practices.