The PEER Tool
Price / Earnings Effect of Emissions Reduction
   Powered by Valutus CO2v™
 
  Overview
  NYU Stern Center for Sustainable Business (CSB) and Valutus developed this tool to help companies quantify the financial market impact of emissions.
  Note: For optimal experience, use a computer or laptop.
     
     
  About the Tool
 
  Why This Tool  
  The PEER Tool is designed to address a common error when thinking about the benefits of climate action and particularly decarbonization: the effect on stock price.

While the increasing attention being paid to the costs and benefits of corporate climate initiatives is promising, the costs are often clearly quantified with the benefits less visible. This is especially true when it comes to the effect of emissions on stock value.

Companies sometimes consider some benefits of climate action (e.g., in relation to customers or operations), but do not include the potential impact, specifically on P/E multiples.

This tool is designed to address that problem. 		 
   
     
  Notes:
• If you close the tab and return at a later time, your data will NOT be saved.
• To clear all data you have entered, click the Cancel button at the bottom of the page.
• More information on the research behind the tool is available after the Results page. 		 
     
     
 
 
 
   
     
                 
  Company Information      
               
               
  Industry  
   
    Location of Headquarters  
   
    Carbon Emissions (Scope 1+2; in Tons CO2e)   (See Below for More Info)        
               
   
   
   
 
       
  Three categories of GHG emissions:

• Scope 1 refers to the direct emissions of the company, such as from burning fossil fuels

• Scope 2 refers to emissions from electricity the company purchases from a utuility or other energy provider.

• Scope 3 refers to the emissions across the company's value chain, but not owned or controlled by the company, encompassing both upstream and downstream activities. While this is a very important part of a company's carbon footprint, research suggests it is not as large a factor in investors' decision making, so it has not been included in the tool.

If you are unsure what to enter for the Carbon Emissions field, try typing "total ghg emissions" followed by the company's name into a search engine. 		 
               
 
  Risk Profile  
           
               
    Risk Profile & Emissions    
    Stock prices are affected by a company's risk profile. Part of that profile includes the potential contribution of emissions. This could include risks arising from, among other factors:

• Customers preferences (if they prefer to buy from a competitor with a lower carbon footprint)
• Regulation
• Price or supply volatility
• Litigation
• Etc. 		   
     
               
     
               
  Company Information (Financial)    
             
               
 
Enter stock price.

If you are unsure, try typing "stock price" and then the company name into a search engine. Stock Price  (Hover for More Info)
     
   
Enter earnings per share.

If you are unsure, try typing "earnings per share" and the company name into a search engine. You can also find it in the company's most recent financial disclosure, such as 10K, annual report, or URD. Earnings Per Share   (Hover for More Info)
     
   
Total market value of the company's stock.

If you are unsure, try typing "market capitalization" and the company's name into a search engine. Market Capitalization   (Hover for More Info)
     
               
       
  Tip: If you are unsure of the stock price, earnings per share or market cap, try entering the term with the company name into a search engine. You can also find earnings per share in the company's most recent financial disclosure, such as 10K, annual report, or URD.  
 
     
 
        
               
 
  Effect on Price / Earnings Ratio  
           
               
    P/E Ratio & Emissions    
       
    But for a company with lower emissions, the P/E Ratio was higher.

How much higher (or lower) depended on:

• Industry
• Size
• Company headquarters location (which can affect regulation) 		 
               
     
               
 
  Results  
           
               
    Results      
       
     
        Low High    
         
    NOTE: Because impact may vary based on a variety of factors (including company size, transparency, and other factors), the results are presented as a range.    
 
     
  About the Research
 
  Research Overview  
  Current Research
The data and analysis driving The PEER Tool has been informed by academic research on how emissions affect share prices. Multiple studies from a variety of authors and sources were leveraged, including studies which covered equities in higher concentrations than are typically included (e.g., over 15,000 versus under 3,000).

It is important to note that not all research on this topic points in the same direction. This is not surprising, given the nature of the topic and the fact that study design, awareness, regulation, measurement, expectations, and many other factors are in a state of constant flux.

Regardless, there is value in considering potential stock price effects as a result of decarbonization.

Business Utility
In business, exact numbers are rarely available for new areas of focus and companies often must act on imperfect information despite the rapid rate of change observed in many industries, such as technology.

While the precise dollar amounts may fluctuate, this tool offers a useful way to consider potential benefits of climate action that might otherwise be overlooked. 		 
   
     
     
     
     
 
     
  Selected Research Sources
 
  Selected Sources  
This tool was informed by research and data from sources including:
  • Lazard and affiliated researchers from Columbia and Imperial College, with multiple studies, including a   
study covering over 15,000, totaling about 80% of global market capitalization
  • European Financial Management  
  • S&P  
  • NYU Stern Center for Sustainable Business  
  • The  London Stock Exchange Group (LSEG)   
  • Net Zero Tracker         
  • Valutus