Evaluating a Company's Net-Zero Carbon Target
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Evaluating a Company’s Net-Zero Carbon Target

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The following content is sponsored by MSCI.

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Evaluating a Company’s Net-Zero Carbon Target

A net-zero carbon target is a climate essential.

Companies from Apple to Microsoft are making commitments to halve their emissions by roughly 2030—and eliminate them altogether by 2050. These targets follow the recommendations set forward by the Paris Agreement in order to avoid devastating climate conditions for future generations.

However, not all targets are rigorous, let alone feasible. To shine a light on this problem, MSCI developed a Net-Zero tracker that helps investors analyze the strength of company targets.

What is Net-Zero?

Net-zero refers to driving down greenhouse gas emissions (GHG) to zero by mid-century.

To achieve this, processes such as carbon removal, carbon reduction, renewable alternatives, and energy efficiency will aid in the transition to carbon neutrality. To date, at least 50 countries and 21% of the largest corporations worldwide have set net-zero targets.

Net-Zero Carbon Analysis

MSCI developed a framework centered on two primary criteria:

 ComprehensivenessAmbition
DescriptionDoes the target focus on the majority of a company’s emissions?How much and how quickly does a target aim to reduce emissions?
Key Components% of company footprint covered by targets

Unit

Target scopes
Projected target emissions against net-zero trajectory in 2030 & 2050

Intention to use carbon offsets

Target year

Thanks to its standardized framework, the analysis helps investors evaluate all companies’ net-zero targets on the same components.

The Net-Zero Dataset

Where is data drawn from, and what determines the net-zero score?

Using MSCI’s Climate Target and Commitments dataset, the drivers of carbon emissions fall into scope 1,2, and 3 emissions. Here is a hypothetical example of how these emission are analyzed:

Drivers of EmissionsDescriptionReported/ EstimatedEmissions (Mega tCO₂e)
Scope 1Direct emissionsReported0.04
Scope 2Indirect emissions from purchased energyEstimated0.18
Scope 3Value-chain emissions*Estimated
Reported
12.47
11.17

* Both upstream (supply chain) and downstream (use of a company’s products)

For investors looking to sincerely address climate change and reduce their portfolio emissions, the Net-Zero Tracker lets investors compare commitments with other companies, informs their climate risk profile, and report portfolio emissions according to frameworks such as the Task Force on Climate-Related Disclosures.

The Net-Zero Scorecard

The Climate Target and Commitments dataset tackles two key issues:

  • Identifies disparities in a company’s net-zero carbon target
  • Identifies the main sources of carbon emissions for a company

Sometimes, companies will set lofty net-zero pledges without having systems of short-term accountability. In other cases companies will set targets that exclude segments of their business.

Let’s consider the following hypothetical leading company, whose net-zero carbon target covers 100% of their business and has 3.8% projected emission reductions annually.

Net-Zero ScorecardKey ComponentsValue
Comprehensiveness% of company footprint covered by target

Unit

Target scopes
100%

tCO₂

1,2,3
AmbitionProjected reduction per year to meet stated target

Intention to use carbon offsets

Target year
3.77% p.a.

No

2030

With a target year of 2030, the company’s net-zero commitment covers all scope 1, 2, and 3 emissions. For these reasons, the company’s net-zero target is credible and has short-term accountability.

Green Credentials

As the year 2030 closes in, there is hope that business as usual will become even less viable.

Companies who refuse to acknowledge the climate crisis will likely face greater pressure from shareholders. Financial markets may reward those with achievable climate strategies. The net-zero carbon target tracker allows investors to think critically as they play a part in this transition.

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Smashing Atoms: The History of Uranium and Nuclear Power

Nuclear power is among the world’s cleanest sources of energy, but how did uranium and nuclear power come to be?

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The History of Uranium and Nuclear Power

Uranium has been around for millennia, but we only recently began to understand its unique properties.

Today, the radioactive metal fuels hundreds of nuclear reactors, enabling carbon-free energy generation across the globe. But how did uranium and nuclear power come to be?

The above infographic from the Sprott Physical Uranium Trust outlines the history of nuclear energy and highlights the role of uranium in producing clean energy.

From Discovery to Fission: Uncovering Uranium

Just like all matter, the history of uranium and nuclear energy can be traced back to the atom.

Martin Klaproth, a German chemist, first discovered uranium in 1789 by extracting it from a mineral called “pitchblende”. He named uranium after the then newly discovered planet, Uranus. But the history of nuclear power really began in 1895 when German engineer Wilhelm Röntgen discovered X-rays and radiation, kicking off a series of experiments and discoveries—including that of radioactivity.

In 1905, Albert Einstein set the stage for nuclear power with his famous theory relating mass and energy, E = mc2. Roughly 35 years later, Otto Hahn and Fritz Strassman confirmed his theory by firing neutrons into uranium atoms, which yielded elements lighter than uranium. According to Einstein’s theory, the mass lost during the reaction changed into energy. This demonstrated that fission—the splitting of one atom into lighter elements—had occurred.

“Nuclear energy is incomparably greater than the molecular energy which we use today.”

—Winston Churchill, 1955.

Following the discovery of fission, scientists worked to develop a self-sustaining nuclear chain reaction. In 1939, a team of French scientists led by Frédéric Joliot-Curie demonstrated that fission can cause a chain reaction and filed the first patent on nuclear reactors.

Later in 1942, a group of scientists led by Enrico Fermi and Leo Szilard set off the first nuclear chain reaction through the Chicago Pile-1. Interestingly, they built this makeshift reactor using graphite bricks on an abandoned squash court in the University of Chicago.

These experiments proved that uranium could produce energy through fission. However, the first peaceful use of nuclear fission did not come until 1951, when Experimental Breeder Reactor I (EBR-1) in Idaho generated the first electricity sourced from nuclear power.

The Power of the Atom: Nuclear Power and Clean Energy

Nuclear reactors harness uranium’s properties to generate energy without any greenhouse gas emissions. While uranium’s radioactivity makes it unique, it has three other properties that stand out:

  • Material Density: Uranium has a density of 19.1g/cm3, making it one of the densest metals on Earth. For reference, it is nearly as heavy (and dense) as gold.
  • Abundance: At 2.8 parts per million, uranium is approximately 700 times more abundant than gold, and 37 times more abundant than silver.
  • Energy Density: Uranium is extremely energy-dense. A one-inch tall uranium pellet contains the same amount of energy as 120 gallons of oil.

Thanks to its high energy density, the use of uranium fuel makes nuclear power more efficient than other energy sources. This includes renewables like wind and solar, which typically require much more land (and more units) to generate the same amount of electricity as a single nuclear reactor.

But nuclear power offers more than just a smaller land footprint. It’s also one of the cleanest and most reliable energy sources available today, poised to play a major role in the energy transition.

The Future of Uranium and Nuclear Power

Although nuclear power is often left out of the clean energy conversation, the ongoing energy crisis has brought it back into focus.

Several countries are going nuclear in a bid to reduce reliance on fossil fuels while building reliable energy grids. For example, nuclear power is expected to play a prominent role in the UK’s plan to reach net-zero carbon emissions by 2050. Furthermore, Japan recently approved restarts at three of its nuclear reactors after initially phasing out nuclear power following the Fukushima accident.

The resurgence of nuclear power, in addition to reactors that are already under construction, will likely lead to higher demand for uranium—especially as the world embraces clean energy.

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Showcasing the Strength of Canadian Gold Mining

Canadian gold mining has grown to become a highly prolific industry, thanks to its geological riches and political stability.

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Showcasing the Strength of Canadian Gold Mining

Gold mining has long played an integral role in shaping Canada’s cities and its modern day economy. The gold mining infrastructure that was built alongside the country’s towns in the 19th century has grown to provide $21.6 billion worth of exports for Canada in 2020.

When combined with the country’s superb geology, Canada’s jurisdictional strengths make it one of the most prolific and secure locations in the world for mining companies to explore, develop, and produce gold.

This infographic sponsored by Clarity Gold dives into how Canada has grown into a nation built for gold mining. Both in how the country facilitates the production of gold, and how the gold mining industry supports Canada’s economy and local communities.

Canada’s Golden Geology and Production

Gold is scattered across the Canadian landscape in a variety of gold mining regions and districts, with the most prolific located between Ontario and Québec.

The 2 billion year-old Archean greenstone belt that arcs through the centre of the Canadian shield provides the foundation for the Abitibi gold belt, which has produced more than 190Moz of gold.

Gold Mining District/RegionProvinces/TerritoriesGold Produced (million troy ounces)
Abitibi Greenstone BeltOntario and Québec>190Moz
Trans-Hudson CorridorSaskatchewan and Manitoba>40Moz
Red LakeOntario>30Moz
Golden TriangleBritish Columbia>5Moz

Source: Resource World

The Trans-Hudson corridor in Saskatchewan and Manitoba has produced more than 40Moz of gold, while the Red Lake mining district of eastern Ontario and the Golden Triangle in British Columbia have delivered >30Moz and >5Moz respectively.

Last year, Canada’s top 10 mines produced 3.26 million ounces of gold combined, equating to more than $6 billion worth of the yellow precious metal.

MineProvince/TerritoryPrimary Owner/Operator2020 Gold Production (thousand troy ounces)
Canadian MalarticQuébecYamana/Agnico Eagle569Koz
Detour LakeOntarioKirkland Lake517Koz
LaRonde (incl. LZ5)QuébecAgnico Eagle350Koz
BrucejackBritish ColumbiaPretium348Koz
PorcupineOntarioNewmont319Koz
MeliadineNunavutAgnico Eagle312Koz
Rainy RiverOntarioNew Gold229Koz
HemloOntarioBarrick Gold223Koz
MeadowbankNunavutAgnico Eagle209Koz
MacassaOntarioKirkland Lake183Koz

Source: Kitco

Ontario and Québec are the powerhouse provinces of Canadian gold production, hosting 30 mines between the two provinces.

A Nation Built for Gold Mining

Canada’s politically secure nature and established permitting process has resulted in five of the 10 largest gold mining companies having projects in Canada. Three Canadian provinces (Saskatchewan, Québec, and Newfoundland & Labrador) are among the world’s 10 most attractive mining investment jurisdictions according to the Fraser Institute’s 2020 survey of mining companies.

Beyond the legal and permitting strengths of the nation, Canada’s extensive network of capital markets has enabled the Canadian companies to dominate the world’s gold mining industry. With Agnico Eagle and Kirkland Lake’s upcoming merger, three of the world’s top five gold mining companies will be headquartered in Canada.

The Canadian equity markets are a key driver of the world’s gold exploration and development funding, with the TSX having raised $7.5 billion in mining equity capital in 2020. Gold still remains the major driver of these money flows, with gold mining companies making up more than half of Canada’s mining exploration budget.

How Gold Mining Gives Back to Canada

Ever since the first discoveries of gold across Canada in the 1800s, the development and production of gold mines has been the foundation for many towns and merchants across the nation.

Today, Canada’s mining industry directly employs more than 392,000 Canadians, with the sector offering the highest average annual industrial rate of pay in the country at $123,000. The industry is also proportionally the largest private sector employer of Indigenous peoples in Canada.

From the nation’s prolific gold deposits to its network of funding through robust public markets for mining equities, gold mining has grown into one of Canada’s most important strengths. The discovery, development, and production of the precious metal will remain an essential pillar of Canada’s economy.

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