We must all strive to achieve the Paris Agreement's goal of reducing global greenhouse gas emissions and achieving a net-zero economy. The sense of urgency has also extended to investors, who are increasingly putting pressure on companies to define clear climate change strategies.

Measuring the impact of a company's carbon footprint

The first step is to calculate the company's carbon footprint. By measuring total greenhouse gas emissions, usually over a year, a company can assess its baseline environmental impact. The analysis includes three types of emissions.

Scope 1 are direct emissions that arise from sources controlled or owned by the company, such as burning fuel in boilers, furnaces and company vehicles. Scope 2 is from the purchase of electricity, steam, heat or cooling, while Scope 3 is from other indirect activities in upstream and downstream business operations such as the supply chain, business travel, commuting and waste. Scope 3 also includes, in the case of a property and asset manager such as Lombard Odier, investments made on behalf of our clients. Scope 4 emissions, or avoidable emissions, have recently attracted attention, in part due to trends in working from home. While these emission reductions occur outside the company's value chain, Scope 4 facilitates decarbonisation for other parts of the economy. (Ebba Lepage)