1. Integrating energy-climate-natural resources performance to enhance risk management, investment strategy and climate engagement
December 2017

2. There is a call for innovation in NDC and climate strategies analysis
Cumulative view of national pledges – not compliant with 2° target
Absence of standards for NDC assessment 1 2
Partial Disclosure
Absence of standard in national climate strategy reporting and consequent heterogeneous available information prevents consistent & systematic analysis
Level of National Effort
« It should be noted that not all pledges demand the same level of effort. A country currently on track to achieve its pledge has not necessarily made a greater effort to mitigate emissions than a country not yet on track.”
Source: “The Emissions Gap Report 2016 A UNEP Synthesis Report”, UNEP, November 2016;
Beyond Ratings has developed the unique and proprietary CLAIM© methodology to address these issues and offer a consistent analytical framework
2017
Beyond Ratings

3. A two-step innovative burden sharing process
1. Allocation criteria
2. Statistical selection
National carbon Budget
15 criteria drawn from the Kaya Equation, representing both capacity and responsibility
A probabilistic approach of allocations: modelling all criteria combination for each country
The mode of each country’s distribution is selected as the most robust carbon budget
Carbon budget at country level correspond to several combinations of criteria. These combinations are not similar among countries. National budget are normed to match global target
2017
Beyond Ratings

4. www.Worldwideclimatepolicy.eu presented at COP 23 + ILB working paper
2017
Beyond Ratings

5. Copyright Beyond Ratings
The CLAIM© methodology allows an NDC benchmarking vs any world climate objective
No NDC correspond to a GES reduction commitment when a CLAIM© 2° budget would have allowed to increase the GES emissions by 2030
2017
Copyright Beyond Ratings

6. We have developed advanced metrics to measure portfolio alignment to 2° scenario
A unique BR expertise…
…to translate NDCs into
2 Climate metrics
NDC publication analysis
Climate Simulation model
Level of NDC alignment vs 2°C (%) 1 +
NDCs performance as a t° increase equivalent 2
Excel Database
Benefit from new 2° alignment indicators to achieve an extensive Climate risk assessment
2017
Beyond Ratings

7. How cool is your investment portfolio?
Your investment scope
Our expertise
Our service
2 degrees service - Determination of the associated T° increase
Identification of more virtuous countries
Country A
Country B
Country C
2,1°C + +
Your portfolio has a potential to become 2,1°C + +
1,9°C
2,2°C
3,8°C
Your portfolio is 3°C
We help our client to target investment opportunities to manage and improve carbon exposure of their portfolios
2017
Beyond Ratings

8. The new agency will capitalize on beyond ratings augmented scoring methodology
Energy key policy indicators
Energy and Power independence
Fossil Fuels Supply Risks
Climate Physical Risks
Climate transition Risks
Air and Water Quality
Natural resources
The ECR Pillar accounts for 20% of BR aggregated score
Beyond Ratings score integrates unique proprietary KPIs to account for the Energy-Climate-Natural resources performance of economies
2017
Beyond Ratings

9. Beyond Ratings augmented credit score provides better explanation of 10 year rates than CRA* ratings
Investment grade (according to CRA)
High yield (according to CRA)
(*) Average rating of S&P, Moody’s & Fitch
Beyond Ratings scores could support an evolution in the distinction between investment grade and high yield bonds
2017
Beyond Ratings

10. beyond ratings credit scores outperform CRA ratings in anticipation of changes in sovereign CDS
The (anti)correlation of BR credit scores with sovereign CDS is 2.5 times higher than that of CRA average ratings. It is highest with a lag of 3 to 4 quarters on average
2017
Beyond Ratings

11. The ECR pillar of BR credit score outperforms CRA ratings in anticipation of changes in sovereign CDS
The outperformance of the ECR pillar is particularly pronounced for energy rentiers and developed importing countries
2017
Beyond Ratings