The Net Environmental Contribution (NEC) metric is a comprehensive tool designed to assess the environmental impact of products, services, or companies on a scale from -100% to +100%. Unlike traditional metrics that focus solely on carbon emissions, the NEC metric evaluates a broad spectrum of environmental factors, including climate change, biodiversity, and resource usage.

Key features of the NEC Metric

• Holistic assessment: The NEC metric goes beyond carbon emissions by evaluating all environmental issues: biodiversity, climate, and resources.
• Lifecycle analysis: It analyzes the environmental impact of a product or service throughout its entire lifecycle, from production to disposal.
• Final use consideration: The metric examines not only how a product or service is made but also to whom it is sold, providing a comprehensive view of its environmental impact.
• Relative measurement: Designed to enable cross-sectorial comparisons of any economic activity, the NEC metric allows for benchmarking across different industries.
• Global applicability: It can be applied to any region, company size, sector, and class of asset, making it a versatile tool for various stakeholders.

Methodology

The NEC metric is built on a transparent, science-based methodology that utilizes quantifiable physical data from peer-reviewed academic sources, third-party studies, and certifying bodies. It employs a bottom-up approach, starting with a detailed analysis of a product or service and aggregating to business units and the entire value chain at the company, portfolio, or index level.

Applications:

• Financial actors: Investors and asset managers can use the NEC metric to guide sustainable investment strategies, build index solutions, engage with companies, demonstrate compliance, and enhance reporting clarity and transparency.
• Companies: Businesses can utilize the NEC metric to measure their environmental impact, compare and rank business units or suppliers, set targets, and gain an in-depth understanding of their sustainability performance.

By providing a comprehensive and transparent assessment of environmental impacts, the NEC metric serves as a valuable tool for economic actors aiming to contribute to the ecological transition and make informed decisions aligned with sustainability goals.