Tonnes of emissions to water per million EUR invested (expressed as a weighted average).

  • Radia Guira

Emissions to water means direct emissions of priority substances as defined in Article 2(30) of Directive 2000/60/EC of the European Parliament and of the Council and direct emissions of nitrates, phosphates and pesticides.

This question is asking for the amount, in tons, of emissions that are discharged into bodies of water per each million Euro invested, presented as a weighted average. The investment referred to here could be in a variety of activities such as in operational processes, infrastructure, production, etc.

To provide further context, a ‘tonne of emissions to water’ is a measure of the amount of certain pollutants and substances that are released into freshwater systems due to the company’s operations. It’s important for a business to keep track of this as it can directly impact the environment, particularly aquatic life and water purity.

The ‘per million Euro invested’ part of this question emphasizes the need to measure the emissions produced relative to the amount of capital the company is deploying. In other words, it asks, ‘for every million Euro we use, how much environmental impact are we causing in the form of water pollution?’.

A ‘weighted average’ is a type of average where each quantity to be averaged is assigned a weight. These weights reflect the importance or significance of each quantity. Thus, the value provided needs to take into account the varying degrees of importance of the emissions in different areas of the business.

(Fictional example: If your company invested 3 million Euros in its operations this year, and over that period of time, it was responsible for the emission of 150 tonnes of harmful substances into water bodies, then the weighted average would be: 150 tonnes / 3 = 50 tonnes of emissions to water per million Euro invested).

Understanding ESG: The Impact of Water Emissions

When it comes to investing, the environmental, social, and governance (ESG) criteria have become a cornerstone for investors who are looking to make responsible decisions. One of the key environmental aspects that firms are now required to report on is their water emissions. In this context, the metric « tonnes of emissions to water per million EUR invested » serves as a pivotal indicator of an investment’s environmental footprint, directly relating to a company’s water pollution impact in relation to its economic value.

Before delving into the specifics, it’s important to have a good grasp of the ESG disclosure requirements established by regulatory authorities. These disclosures not only enhance transparency but also allow investors to make more informed decisions based on the sustainability practices of the entities they choose to invest in.

Calculating Water Emissions for Investment Portfolios

The process of calculating tonnes of emissions to water per million EUR invested involves a series of steps. First, businesses must account for all the direct and indirect water emissions associated with their operations. To do this, they should measure the total mass of contaminants released into water bodies due to their business activities. These contaminants can range from organic pollutants to hazardous chemicals, and their measurement must be in accordance with international standards and local environmental regulations.

After quantifying total water emissions, the next step is to normalize this figure by the total economic value of the investments. This is where the ‘per million EUR invested’ part comes into play. By doing this, it provides a relative indicator that can be compared across different companies and industries, allowing for an apples-to-apples comparison of their environmental impact related to water pollution.

For a detailed understanding of the indicators that must be taken into account, one can refer to the Principal Adverse Impact (PAI) indicators which outline the adverse sustainability impacts that should be considered by investors in their decision-making process.

Best Practices for Reporting Water Emissions

Reporting on water emissions is not just a matter of regulatory compliance; it’s also about taking responsibility for the environmental impact of business activities. To ensure accuracy and reliability in reporting, companies should adopt a systematic approach to data collection and management. This involves keeping precise records, using established methodologies for measurement, and, where possible, third-party verification of the data.

Moreover, consistency in reporting is essential. Firms are expected to provide these figures on a regular basis, allowing for tracking progress over time. This is not only beneficial for the investors and regulatory bodies but also for the companies themselves, as it can highlight areas for improvement in their environmental performance.

Investors looking for guidance on the reporting format can consult the Principal Adverse Sustainability Impacts statement. This document offers a framework for companies to disclose their adverse sustainability impacts, including those related to water emissions, in a structured and clear manner.

In conclusion, understanding and reporting on « tonnes of emissions to water per million EUR invested » is a vital part of ESG compliance for businesses today. It not only reflects a company’s environmental stewardship but also provides essential information that investors need for responsible investment decisions. At Matter, we are committed to helping our clients navigate these complexities and achieve their ESG reporting goals with precision and clarity.