README.md

In 2DegreesInvesting/r2dii.analysis: Measure Climate Scenario Alignment of Corporate Loans

r2dii.analysis

These tools help you to assess if a financial portfolio aligns with climate goals. They summarize key metrics attributed to the portfolio (e.g. production, emission factors), and calculate targets based on climate scenarios. They implement in R the last step of the free software ‘PACTA’ (Paris Agreement Capital Transition Assessment; https://2degrees-investing.org/). Financial institutions use ‘PACTA’ to study how their capital allocation impacts the climate.

Installation

Install the released version of r2dii.analysis from CRAN with:

install.packages("r2dii.analysis")

Or install the development version of r2dii.analysis from GitHub with:

# install.packages("devtools")
devtools::install_github("2DegreesInvesting/r2dii.analysis")

How to raise an issue?

Example

• Use library() to attach the packages you need. r2dii.analysis does not depend on the packages r2dii.data and r2dii.match; but we suggest you install them – with install.packages(c("r2dii.data", "r2dii.match")) – so you can reproduce our examples.

library(r2dii.data)
library(r2dii.match)
library(r2dii.analysis)

• Use r2dii.match::match_name() to identify matches between your loanbook and the asset level data.

matched <- match_name(loanbook_demo, abcd_demo) %>%
  prioritize()

Add Scenario Targets

• Use target_sda() to calculate SDA targets of CO2 emissions.

matched %>%
  target_sda(
    abcd = abcd_demo,
    co2_intensity_scenario = co2_intensity_scenario_demo,
    region_isos = region_isos_demo
  )
#> Warning: Column `name_ald` is deprecated as of r2dii.match 0.1.0, please use
#> `name_abcd` instead.
#> Warning: Column `sector_ald` is deprecated as of r2dii.analysis 0.2.0, please use
#> `sector_abcd` instead.
#> Warning: Removing abcd rows where `emission_factor` is NA
#> # A tibble: 166 × 6
#>    sector  year region         scenario_source emission_factor… emission_factor…
#>    <chr>  <dbl> <chr>          <chr>           <chr>                       <dbl>
#>  1 cement  2013 advanced econ… demo_2020       projected                  0.0217
#>  2 cement  2013 developing as… demo_2020       projected                  0.0606
#>  3 cement  2013 global         demo_2020       projected                  0.658 
#>  4 cement  2014 advanced econ… demo_2020       projected                  0.0219
#>  5 cement  2014 developing as… demo_2020       projected                  0.0604
#>  6 cement  2014 global         demo_2020       projected                  0.659 
#>  7 cement  2015 advanced econ… demo_2020       projected                  0.0221
#>  8 cement  2015 developing as… demo_2020       projected                  0.0603
#>  9 cement  2015 global         demo_2020       projected                  0.660 
#> 10 cement  2016 advanced econ… demo_2020       projected                  0.0223
#> # … with 156 more rows

• Use target_market_share to calculate market-share scenario targets at the portfolio level:

matched %>%
  target_market_share(
    abcd = abcd_demo,
    scenario = scenario_demo_2020,
    region_isos = region_isos_demo
  )
#> Warning: Column `name_ald` is deprecated as of r2dii.match 0.1.0, please use
#> `name_abcd` instead.
#> Warning: Column `sector_ald` is deprecated as of r2dii.analysis 0.2.0, please use
#> `sector_abcd` instead.
#> # A tibble: 1,790 × 10
#>    sector     technology  year region scenario_source metric     production
#>    <chr>      <chr>      <int> <chr>  <chr>           <chr>           <dbl>
#>  1 automotive electric    2020 global demo_2020       projected     324592.
#>  2 automotive electric    2020 global demo_2020       target_cps    324592.
#>  3 automotive electric    2020 global demo_2020       target_sds    324592.
#>  4 automotive electric    2020 global demo_2020       target_sps    324592.
#>  5 automotive electric    2021 global demo_2020       projected     339656.
#>  6 automotive electric    2021 global demo_2020       target_cps    329191.
#>  7 automotive electric    2021 global demo_2020       target_sds    352505.
#>  8 automotive electric    2021 global demo_2020       target_sps    330435.
#>  9 automotive electric    2022 global demo_2020       projected     354720.
#> 10 automotive electric    2022 global demo_2020       target_cps    333693.
#> # … with 1,780 more rows, and 3 more variables: technology_share <dbl>,
#> #   scope <chr>, percentage_of_initial_production_by_scope <dbl>

• Or at the company level:

matched %>%
  target_market_share(
    abcd = abcd_demo,
    scenario = scenario_demo_2020,
    region_isos = region_isos_demo,
    by_company = TRUE
  )
#> Warning: Column `name_ald` is deprecated as of r2dii.match 0.1.0, please use
#> `name_abcd` instead.
#> Warning: Column `sector_ald` is deprecated as of r2dii.analysis 0.2.0, please use
#> `sector_abcd` instead.
#> Warning: You've supplied `by_company = TRUE` and `weight_production = TRUE`.
#> This will result in company-level results, weighted by the portfolio
#> loan size, which is rarely useful. Did you mean to set one of these
#> arguments to `FALSE`?
#> # A tibble: 32,402 × 11
#>    sector    technology  year region scenario_source name_abcd metric production
#>    <chr>     <chr>      <int> <chr>  <chr>           <chr>     <chr>       <dbl>
#>  1 automoti… electric    2020 global demo_2020       toyota m… proje…    324592.
#>  2 automoti… electric    2020 global demo_2020       toyota m… targe…    324592.
#>  3 automoti… electric    2020 global demo_2020       toyota m… targe…    324592.
#>  4 automoti… electric    2020 global demo_2020       toyota m… targe…    324592.
#>  5 automoti… electric    2021 global demo_2020       toyota m… proje…    339656.
#>  6 automoti… electric    2021 global demo_2020       toyota m… targe…    329191.
#>  7 automoti… electric    2021 global demo_2020       toyota m… targe…    352505.
#>  8 automoti… electric    2021 global demo_2020       toyota m… targe…    330435.
#>  9 automoti… electric    2022 global demo_2020       toyota m… proje…    354720.
#> 10 automoti… electric    2022 global demo_2020       toyota m… targe…    333693.
#> # … with 32,392 more rows, and 3 more variables: technology_share <dbl>,
#> #   scope <chr>, percentage_of_initial_production_by_scope <dbl>

Utility Functions

The target_*() functions provide shortcuts for common operations. They wrap some utility functions that you may also use directly:

• Use join_abcd_scenario() to join a matched dataset to the relevant scenario data, and to pick assets in the relevant regions.

loanbook_joined_to_abcd_scenario <- matched %>%
  join_abcd_scenario(
    abcd = abcd_demo,
    scenario = scenario_demo_2020,
    region_isos = region_isos_demo
  )
#> Warning: Column `name_ald` is deprecated as of r2dii.match 0.1.0, please use
#> `name_abcd` instead.
#> Warning: Column `sector_ald` is deprecated as of r2dii.analysis 0.2.0, please use
#> `sector_abcd` instead.

• Use summarize_weighted_production() with different grouping arguments to calculate scenario-targets:

# portfolio level
loanbook_joined_to_abcd_scenario %>%
  summarize_weighted_production(scenario, tmsr, smsp, region)
#> # A tibble: 702 × 9
#>    sector_abcd technology  year scenario  tmsr    smsp region weighted_producti…
#>    <chr>       <chr>      <int> <chr>    <dbl>   <dbl> <chr>               <dbl>
#>  1 automotive  electric    2020 cps       1    0       global            324592.
#>  2 automotive  electric    2020 sds       1    0       global            324592.
#>  3 automotive  electric    2020 sps       1    0       global            324592.
#>  4 automotive  electric    2021 cps       1.12 0.00108 global            339656.
#>  5 automotive  electric    2021 sds       1.16 0.00653 global            339656.
#>  6 automotive  electric    2021 sps       1.14 0.00137 global            339656.
#>  7 automotive  electric    2022 cps       1.24 0.00213 global            354720.
#>  8 automotive  electric    2022 sds       1.32 0.0131  global            354720.
#>  9 automotive  electric    2022 sps       1.29 0.00273 global            354720.
#> 10 automotive  electric    2023 cps       1.35 0.00316 global            369784.
#> # … with 692 more rows, and 1 more variable: weighted_technology_share <dbl>

# company level
loanbook_joined_to_abcd_scenario %>%
  summarize_weighted_production(scenario, tmsr, smsp, region, name_abcd)
#> # A tibble: 9,036 × 10
#>    sector_abcd technology  year scenario  tmsr    smsp region name_abcd        
#>    <chr>       <chr>      <int> <chr>    <dbl>   <dbl> <chr>  <chr>            
#>  1 automotive  electric    2020 cps       1    0       global toyota motor corp
#>  2 automotive  electric    2020 sds       1    0       global toyota motor corp
#>  3 automotive  electric    2020 sps       1    0       global toyota motor corp
#>  4 automotive  electric    2021 cps       1.12 0.00108 global toyota motor corp
#>  5 automotive  electric    2021 sds       1.16 0.00653 global toyota motor corp
#>  6 automotive  electric    2021 sps       1.14 0.00137 global toyota motor corp
#>  7 automotive  electric    2022 cps       1.24 0.00213 global toyota motor corp
#>  8 automotive  electric    2022 sds       1.32 0.0131  global toyota motor corp
#>  9 automotive  electric    2022 sps       1.29 0.00273 global toyota motor corp
#> 10 automotive  electric    2023 cps       1.35 0.00316 global toyota motor corp
#> # … with 9,026 more rows, and 2 more variables: weighted_production <dbl>,
#> #   weighted_technology_share <dbl>

Get started.

Funding

This project has received funding from the European Union LIFE program and the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports this initiative on the basis of a decision adopted by the German Bundestag. The views expressed are the sole responsibility of the authors and do not necessarily reflect the views of the funders. The funders are not responsible for any use that may be made of the information it contains.

2DegreesInvesting/r2dii.analysis documentation built on May 18, 2022, 2:48 a.m.