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Environmental Valuation

Why apply valuations to environmental impacts?


Traditional approaches to environmental impact measurement provide a variety of metrics. For land use it is hectares, for carbon and other pollutants it is tonnes and for water it is cubic meters. This makes it difficult to compare the relative contribution of each impact and therefore prioritise risks.

Trucost solves this problem by applying monetary valuations to each impact, thereby providing an overarching common metric to assess risk and opportunity across companies and portfolios. Furthermore, applying valuations allow a financial institution to integrate sustainability risk into financial decisions (revenue at risk, EBITDA at risk, integration into DCF analysis, materiality matrices etc.).


What is included in the scope of the analysis?


The calculator tool applies the chosen price set to the impacts associated with a company's own business activities and those of its upstream suppliers, all the way back to raw material extraction. Environmental impacts are often concealed within global supply chains. We use environmentally extended input output life cycle analysis (EEIO-LCA) modelling to reveal liabilities at each tier of the value chain for holistic risk and opportunity analysis.