CPI Ownership Methodology

The report proposes a two-step assessment approach to link financial institutions' net zero strategies to real-world impacts. It emphasizes tracking investments in new assets rather than existing portfolios to avoid the 'divestment' loophole where assets are transferred without reducing emissions. The methodology uses a multi-level ownership tree (up to Level 2) to attribute finance to indirect investors based on equity and debt weightings, utilizing data from sources like Bloomberg Terminal and CPI's Global Landscape of Climate Finance.

• Existing portfolio emission metrics are limited because they focus on existing assets and can be bypassed through divestment, where assets are sold to owners with weaker standards without reducing actual emissions.
• The proposed methodology focuses on new assets and the expansion of existing ones to identify investment decisions that either lock in additional emissions or mitigate them.
• To capture the full contribution of financial actors, the methodology attributes direct investments to indirect investors (Level 1, Level 2, and beyond) through equity and debt ownership structures.
• The attribution process for indirect financing involves calculating equity and debt weightings based on book values and applying ownership stakes to determine the finance attributed to each level of owner.
• The analysis is limited to Level 2 owners to balance operational practicality with coverage, as the number of entities increases exponentially at deeper levels and the significance of ownership stakes diminishes.
• The methodology employs specific ownership thresholds, generally tracking investors with a 5% stake or more, though an exception is made for pension funds to ensure they are not excluded due to typically smaller stakes.
• To prevent double counting when aggregating indirect financing across entity categories, the methodology uses an attribution weighting approach to ensure the total matches the real-world direct investment.

APA

Micale, V., Vishnumolakala, H., & Dilworth, E. (2024). CPI Ownership Methodology. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/NZFT-Ownership-methodology.pdf

Chicago

Micale, Valerio, Harsha Vishnumolakala, and Eddie Dilworth. CPI Ownership Methodology. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/NZFT-Ownership-methodology.pdf.

Wikipedia

{{cite report |last1=Micale |first1=Valerio |last2=Vishnumolakala |first2=Harsha |last3=Dilworth |first3=Eddie |title=CPI Ownership Methodology |publisher=Climate Policy Initiative |date=October 2024 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/NZFT-Ownership-methodology.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{micale2024cpi, author = {Micale, Valerio and Vishnumolakala, Harsha and Dilworth, Eddie}, title = {{CPI Ownership Methodology}}, institution = {Climate Policy Initiative}, year = {2024}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/09/NZFT-Ownership-methodology.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }