latamen

# The CO₂lumnist: Carbon scopes participating at the Tokyo 2021 Olympics

22-07-2021 | Column

Investors rely on data to make decisions on climate strategy. But the data is far from perfect, and it doesn’t always add up. In the first of a new series of columns taking a more light-hearted look at the issue, and as the Olympics begins in Tokyo, Robeco data scientist Thijs Markwat draws parallels with trying to figure out the heptathlon.

• Thijs
Markwat
Researcher

This summer, for the first time in history, the modern Olympic games takes place in an odd year. I am not a big fan of athletics, and I have never ever watched athletics outside of the Olympic games. But for some reason, during every Olympic edition, I always tend to watch parts of the athletic heptathlon.

I find it very impressive for one single person to be proficient in so many different disciplines. The different events that make up the heptathlons are show in the table below. Interestingly, the heptathlon differs quite a bit between men and women.

Climate investing: from urgency to solutions
 Women (outdoor) Men (indoor) Long jump Long jump High jump High jump Shot put Shot put Javelin throw Pole vault 100 meters hurdles 60 meters hurdles 200 meters dash 60 meters dash 800 meters dash 1000 meters dash

The main difference between the men’s and women’s heptathlon is the location – the women’s is outdoors while the men’s is indoors. This also explains a bit the different events between men and women, as javelin throwing in an indoor venue might not be the smartest idea. The indoor location also limits the sprint distances to 60 meters. At the end of the Olympic heptathlon, after all heptathletes have completed the seven events, one athlete receives the gold medal.

But how to decide who the winner is? Clearly, scores of different events cannot simply be summed into a total score. For example, adding a 2-meter high jump to a 22-second 200 meters dash score… would that make sense? Of course it doesn’t. Therefore, a special scoring system was developed by the mathematician Karl Ulbrich to make different events comparable and addable.

For the remainder of this memo I am going to simplify matters and only look at the long jump, the high jump and the shot put, which are the common events in both heptathlons. Let’s now look at the women’s heptathlon records for these three events, as shown in the table below.

 Best Spread High jump 2.0 0.3 Long jump 7.3 1.0 Shot put 17.3 3.1 Total 26.6

These results are all expressed in meters and thus, at least technically, can be added up. But still, we could argue about the meaning of the 26.6 meters. Does adding the outcomes of the high jump, long jump and shot put makes any sense? To get some more insights in the interpretation of this total score, I have added the column ‘spread’.

This number indicates the common range of outcomes. So, high jumps usually vary between 1.7 and 2.0 meters, while shot puts generally vary between 14.2 and 17.3 meters. There is a clear positive relationship between the distance and spread of the events. Thus, events covering a larger distance have more impact on the total score. Therefore, if scores are blindly added in this ‘triathlon’, a top ranking in the shot put seems to be a prerequisite for victory, while the high jump is just in there for show.

## It doesn’t always add up

Does the fact that you can add things up imply that you should add things up? No of course not, but this is exactly what happens with carbon accounting! Scope 1, 2, and 3 emissions can technically be added as all are denoted in tons of CO2.

In terms of size and spread it is actually pretty accurate to state that scope 1 emissions are like the long jump, scope 2 emissions like the high jump, and scope 3 emissions like the shot put. Scope 3 emissions are much larger and also have a much larger spread. Therefore, like the shot put in the example, the only thing that really impacts aggregated carbon emissions are scope 3 emissions. And like the high jump, scope 2 (and to a lesser extent scope 1) is just in there for show.

Thus, instead of blindly adding scopes, a method should be developed to make the scopes comparable like they do for heptathlons! Obviously, for carbon accounting, this method should ideally resolve the severe double counting issues in scope 3. However, this will be very difficult to achieve, and therefore an alternative scoring system could be a great (intermediate) solution. But remember, blindly adding all scopes is like only including scope 3.

### Important information

The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).

This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor. Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States.

This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.