ClimateWorks Australia has teamed up with its US counterpart, the ClimateWorks Foundation, to develop a global energy productivity benchmark for listed industrial companies.
The Energy Productivity Index for Companies, launched in New York on Monday, will quantify energy risks and the financial value of improving energy productivity for companies involved in the analysis, ClimateWorks Australia head of research Amandine Denis said.
“The project will provide investment funds with a greater understanding of energy-related issues in their portfolios and drive companies to improve their energy performance,” Ms Denis said.
One of the world’s largest public pension funds, the California State Teachers’ Retirement System, has signed on as lead investor.
Ms Denis said investors often didn’t have access to information so they could accurately assess energy risks faced by companies, nor could they assess the financial benefits of energy productivity improvements.
“This project will help equip investors with evidence-based information crucial to conducting meaningful engagement with companies on this topic,” she said. “It will also build an energy risk profile for selected industry sectors and highlight the differences between companies within each sector.
“A company’s energy performance will be assessed in terms of their revenue or production levels per unit of energy used. Other factors such as exposure to energy risks and potential financial uplift will be considered as part of the benchmark.”
Ms Denis said preliminary results showed that improved energy efficiency could translate to between a 2-10 per cent annual increase on company profit.
ClimateWorks foundation program director Dan Hamza-Goodacre said energy productivity improvements could mean economic growth, more jobs and improved quality of life.
“The project will draw on global data from the Carbon Disclosure Project to establish a benchmark for energy productivity performance,” he said. “It will compare listed companies’ energy performance in recent years and compare this with a best practice benchmark performance to highlight further potential for improvement.”