The most relevant information that lenders could provide is a full and detailed map of what type of project or solution they financed according to the three categories described above. For example, a backward-looking disclosure on the amount of funding (equity and debt) provided to projects that abate emissions in fossil fuel-intensive industries (e.g. cement, fertilizers, plastics, steel), that avoid emissions (from renewable energy, to clean energy storage, to recycling, green transportation, etc), and that sequester CO2e. It would also be relevant for them to disclose their funding towards climate change adaptation. In addition, financial institutions should openly disclose their funding of fossil fuel projects (from oil & gas exploration and production to coal). As mentioned before, the volume of funding in this level of detail is critical information to disclose, but is not enough. Financial institutions should also estimate the impact of all of their funding using the common metric of megatons of CO2e. How many tons of CO2e were not emitted in the first place, or will be able to be sequestered given the projects that were funded? When will that CO2e take place? With those figures, analysts would also be able to quantify $/CO2e and it will become very clear what are the solutions that cost the least and impact the most. We refer to these metrics as Time Value of Carbon and Carbon Returns.
A new taxonomy to accelerate change