Towards Net Zero - How to integrate climate impact assessments in E.ON's investment process

Abstract (Swedish)

Detta examensarbete utforskar integrationen av metoder för att bedöma klimatpåverkan inom investeringsprocesser hos energiföretag, med särskilt fokus på E.ON i Sverige. Vikten av att ta itu med ökande klimatförändringar har intensifierats, vilket kräver en transparent och effektiv strategi för företag för att minska sin miljöpåverkan från investeringar. Denna studie syftar till att identifiera, utvärdera och rekommendera lämpliga verktyg för klimatbedömning som kan integreras i energiföretagens strategiska beslutsprocesser. Genom detta kan gapet mellan teoretiska ramverk och praktisk tillämpning täppas till. Studien använder en kvalitativ ansats, som inkluderar en litteratursökning och empirisk datainsamling genom intervjuer och workshops med interna intressenter på E.ON, samt andra energiföretag. Forskningsmetodiken är grundad i Yins fallstudiemetod, vilket möjliggör en mer djupgående utforskning av ämnet.

Viktiga resultat från studien visar att integrationen av specifika verktyg för klimatbedömning, såsom Carbon Emissions Ratio (CER) scale och en checklista, kan förbättra visualiseringen och hanteringen av koldioxidutsläpp på både projekt- och portföljnivå. Dessa verktyg bidrar inte bara till att styra investeringsbeslut i linje med mer omfattande miljömål, utan stärker också företagets ansvar och intressenters förtroende för dess hållbarhetsåtaganden. Avhandlingen avslutas med strategiska rekommendationer för implementering av dessa verktyg inom E.ON:s investeringsprocess. Vidare diskuteras bredare implikationer för liknande energiföretag, samt potentiella områden för framtida forskning, vilket betonar behovet av kontinuerlig förbättring och anpassning av verktygen för att hålla jämna steg med utvecklande miljöstandarder och förväntningar. Denna studie bidrar till den akademiska och praktiska förståelsen av hållbara investeringspraxis inom energisektorn.

Abstract

This master thesis explores the integration of climate impact assessments within the investment processes of energy companies, with a specific focus on E.ON in Sweden. The urgency to address climate change has intensified, necessitating transparent and effective strategies within corporate investment decisions to mitigate environmental impact. This study aims to bridge the gap between theoretical frameworks and practical application by identifying, evaluating, and recommending suitable carbon assessment tools that can be embedded into the strategic decision-making processes of energy companies. The study employs a qualitative approach, incorporating a comprehensive literature review and empirical data collection through interviews and workshops with internal stakeholders at E.ON, as well as other energy companies. The research methodology is grounded in Yin's case study method, which facilitates an in-depth exploration of the subject.

Key findings from the research indicate that integrating specific carbon assessment tools, such as the Carbon Emissions Ratio (CER) scale and a structured checklist, can significantly enhance the visibility and management of carbon impacts at both project and portfolio levels. These tools not only aid in aligning investment decisions with broader environmental goals but also strengthen corporate accountability and stakeholder confidence in sustainability commitments.

The thesis concludes with strategic recommendations for implementing these tools within E.ON’s investment framework. Broader implications for similar energy companies are also discussed, as well as potential areas for future research, emphasizing the need for continuous improvement and adaptation of assessment tools to keep up with evolving environmental standards and stakeholder expectations. This study contributes to the academic and practical understanding of sustainable investment practices in the energy sector, aiming to foster a more sustainable future.

Popular Abstract

Assessing Climate Impact of Investments – How and Why Should Energy Companies Act?


Sustainability and carbon disclosure have become increasingly common as a result of regulations and pressure from internal and external stakeholders. Since many Swedish energy companies are dedicated to being a driving factor in the development towards a sustainable energy industry, it is increasingly important for them to work with CO2-reducing measures, especially when it comes to their investments. One way of doing so is through the implementation of carbon assessment tools.

There are many uncertainties as to how to best measure climate impact, and influence one's investments to become less carbon-intensive. There are a number of different climate assessment methods presented in research, such as internal carbon pricing methods and carbon intensity calculations. However, uncertainties still exist as to how these tools should be designed in order to be most effectively implemented in a company's decision or investment process.

Therefore, this study focused on closing the gap between theoretical frameworks and methods and their practical application. By examining a large Swedish energy company, four factors were identified as critical when evaluating the suitability of a carbon assessment tool. These are: user-friendliness, quantifiability, steering potential and feasibility.

Based on an analysis of these factors, the study shows that the combination of a quantitative and a qualitative climate assessment tool, such as a carbon emissions ratio scale and a checklist, would enable energy companies to effectively evaluate investments, projects or an entire portfolio based on its climate impact. Furthermore, it would also contribute to building awareness of climate impact within the organization and increase transparency by making carbon emissions more tangible and understandable.

The study also showed that in order to effectively integrate climate impact into the investment process, it is vital to begin by progressively visualizing, communicating and teaching the organization about investments’ climate impact. Therefore, it is preferred to begin with implementing simple methods that can be developed as the organization matures. Consequently, more complex carbon assessment methods, such as internal carbon pricing, might not be suitable for companies that are still early in their journey towards climate neutrality.


Authors: Carl Johan Flisberg & Henrik Shadman

• author: Flisberg, Carl Johan and Shadman, Henrik
• supervisor: Lars Bengtsson
• organization: Innovation Engineering
• alternative title: Mot nettonoll - Hur en utvärdering av klimatpåverkan kan integreras i EONs investeringsprocess
• course: INTM01 20241
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Climate impact assessment, carbon assessment tools, sustainable investments, carbon emissions ratio, carbon accounting, internal carbon pricing, change management
• language: English
• id: 9162395
• date added to LUP: 2024-06-19 11:06:42
• date last changed: 2024-06-19 11:06:42