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HomePaperDeveloping Transparent and Scalable Climate Indicators for about 100,000 European firms. – A Novel Methodology Suitable for Small Medium Enterprises Using Product Information.

Developing Transparent and Scalable Climate Indicators for about 100,000 European firms. – A Novel Methodology Suitable for Small Medium Enterprises Using Product Information.

10 June 2025
Authors: Anne Schoenauer
Presenter: Anne Schoenauer
Abstract:

As sustainability gains importance in regulatory and financial contexts, the need for accurate climate data on firms intensifies. Current climate datasets predominantly cover large firms, often overlooking Small and Medium Enterprises (SMEs) which constitute 99% of EU firms and are vital to both the economy and environmental impact. Addressing this gap, our paper introduces a methodology to derive climate indicators for SMEs, using Life Cycle Assessment and climate scenario data. We construct a “relative emission reduction potential indicator” and a “transition risk indicator” at the product level, aggregating these at the firm level to assess relative emission reduction potential and transition risks. Applied to about 100,000 firms across five European countries, our method is scalable, reproducible, and transparent, requiring minimal data on products, locations, and business types. The dataset can be fully re-constructed with the published open-source code on GitHub. This methodology not only assists in identifying high-risk firms but also those with relative high emission reduction potential. Thus, it supports an analysis of risk and the impact perspective in the climate-finance relationship.

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