Job Pitch

I'm going on the job market!

I wrote up a pitch about what I want to do.  I will probably want to keep editing it a bit.

Investors as well as environmental activists could be more effective if they better understood the pressures corporate boards face from the finance industry. For example, perverse incentives in the financial system may make long term planning difficult.
Corporations should sometimes be insulated from these pressures. I want to analyze how financial incentives influences corporate governance regarding climate change. Then I can help environmental organizations and long-term investors develop ways to respond.  Ways that corporations benefit from managing their emissions may also need to be identified and better publicized to the financial industry.
I'm also interested in improving corporate data management for GHG emissions. These software systems help corporations manage emissions reduction as well as report results to stakeholders such as investors or consumers. These systems always need to be customized for each organization because the operations of different organizations vary so much. As a result, experimentation and iteration is always needed. However, in order for the information to be useful for external stakeholders, these systems also need to be compatible with each other to some extent. For example, managing and reporting the emissions of a supply chain where suppliers have many other customers, can be challenging.

GHG Intensities of Companies

I made this table today for my report.  The total GHG is the combined Scope 1, 2, and 3 for each company.  All of them reported the Scope 1 and 2 for 2013, but I had to estimate the Scope 3 for Exxon Mobil, Target, and TJX.  Which carbon metric should be used?  Well, if we are comparing between companies in the same sector, it doesn't seem to matter.  Exxon Mobil is always worse than Chevron, Target is always worse than TJX, and Google is always better than Microsoft.  So what does this mean?  Well, I'm not exactly sure.  

GHG/revenue (lbs/$)	GHG/marketcap	GHG/enterprise value	GHG/profit
Exxon Mobil	Exxon Mobil	Exxon Mobil	Exxon Mobil
Dow Chemical	Dow Chemical	Chevron	Dow Chemical Company
Chevron	Chevron	Dow Chemical Company	Chevron
Target	Target	Target	Target
Microsoft	TJX Companies Inc.	TJX Companies Inc.	TJX Companies Inc.
TJX Companies	Microsoft	Microsoft	Microsoft
Google	Google	Google	Google

Carbon Commoditization

I am reading a paper that describes my perspective on carbon disclosure and accounting.  Usually I struggle with articulating the implications and difficulties of measuring and reporting corporate emissions so I'm pretty excited to have found something that will help me communicate my interests.  In other words, I found some relevant google key words and jargon!  

Crucially, the institutionalization of carbon reporting as a form of governance relies on a successful project of ‘commensuration’, defined by Levin and Espeland (2002, p. 121) as ‘the transformation of qualitative relations into quantities on a common metric.’

The carbon market is not a naturally existing entity; the commodification of carbon is a political and institutional project, requiring an extensive legal and bureaucratic infrastructure to define and measure carbon units for various activities and gases, allocate and adjudicate property rights, and to establish rules for trading across national boundaries and different carbon jurisdictions.

Kolk, Ans, David Levy, and Jonatan Pinkse. 2008. “Corporate Responses in an Emerging Climate Regime: The Institutionalization and Commensuration of Carbon Disclosure.” European Accounting Review 17 (4): 719–45. doi:10.1080/09638180802489121.

Carbon Metrics for Investors

Interest in measuring the GHG footprint and the GHG intensity of investment portfolios is growing!  On the one hand, it's not saying much since so few investors cared in the first place.  Still, it's enough to sustain a growing industry for generating these carbon metrics such as Trucost (and CAMRADATA?).  In fact, Bloomberg terminals (computers for traders) now have a Carbon Risk Valuation Tool.  For the investors that don't care, activist organizations such as 350.org have started calling for them to divest from fossil fuels.  There are also (maybe?) individuals who want to better understand the carbon impacts of their own savings, investments, and retirement plans.

There are several different ways to calculate the footprint for investments, often referred to as financed emissions.  There are then several different ways to calculate the carbon intensities of investments, where the carbon intensity is the carbon footprint normalized by something such as revenue.  This report by the 2 Degrees Investing Initiative presents a good overview of these different metrics.

Really, the metric one uses depends on what it is being used for, what decision it is informing.  These decisions depend on the investor (activist's) theory of change and ethics.  For example, an investor making decisions on how to allocate funds might be purely motivated to minimize exposure to carbon risks.  In other words, it is an investment strategy based on the theory of change that regulations and other future events will make carbon intensive companies less profitable.  The investor behavior is not based on the ethic that it is immoral to invest in carbon intensive companies.  It makes economic and professional sense that this investor should use a metric that will highlight the exposure to carbon risk.

An individual whose money is managed by said investor might think that it is immoral to invest in carbon intensive companies just as they might think it's immoral to invest in tobacco companies.  Then, regardless of what investment strategy was actually pursued, they might care about how much emissions his or investments are "responsible for."

I am working on a report that claims that the carbon metric used by investors to allocate investments doesn't have to be and in fact probably shouldn't be the same one used to evaluate the ethical (social?) responsibilities of the investments.