Another one bites the dust. Earlier this spring I attended a Cap and Trade seminar in Toronto and was thoroughly impressed with a company presenting called “Point Carbon”. Well, it appears I’m not the only one that found their knowledge and data to be impressive. Today, Thompson Reuters agreed to purchase Point Carbon for an undisclosed price
So, what? What does this have to do with Sustainable Investing? A big element of Sustainable Investing is understanding the potential risks and opportunities that lie ahead for companies in our investable universe. As far as risks, at the forefront is carbon risk. Most public companies generate carbon emissions from their operations. If we put a price on carbon, be it $5, $20 or $100, there is still a potential liability to said company. We want to assess how a management team will measure, disclosure and manage this potential liability. In order to do so such an assessment, one needs accurate data.
With today’s announcement of Thompson Reuters purchase of “Point Carbon” they have now evened the data war with Bloomberg. Last December Bloomberg purchased “New Energy Financial”, only that company’s second purchase in 30 years. What do both of these company’s share? Both provide news, data and analysis of carbon and renewable energy markets. As someone who looks at the potential risks and opportunities around investments, it appears I’m not the only one that feels that a price on carbon is not so far off… and that with it will come carbon trading systems. Of course, to be able to appropriately price carbon and it’s relative value to underlying businesses, one needs accurate data. Data’s great, but the interpretation of this data to put it into context of the overall marketplace is where the real value lies. Looks like two global data providers to the financial community share the same view. My crystal ball tells me that corporations need to be prepared. My bet is more consolidation and disclosure requirements are on their way.