Frequently Asked Questions

What is Entelligent® technology?


Our  technology, patented in 2019, is a climate and financial data processing system that estimates the effect of a changing  climate and  changing global energy production and consumption patterns  on public  equity  performance.  Entelligent  evaluates  a range of  scenarios  to provide investment strategy guidance on climate change risk.

Smart Climate®  uses a 3-step process to derive  our  E-Score®, a  rating  system that  grades public companies  according to their  transition risk relative to  a  peer  group.

Entelligent’s  Smart Climate®  technology  is trusted by global leaders  in sustainable investment  including the United Nation Joint Staff Pension Fund, Societe Generale, FactSet and S-Network.

 

How does the  3-step  process  work?   


First,  Entelligent  evaluates  multiple  climate  scenarios  with  an integrated assessment model. The model  simulates energy transitions arising from a range of  policy, technology, demographic and economic  outlooks.

Second, for each  scenario,  Entelligent  generates   price  and profitability  forecasts for  every major  energy  source  (e.g. oil, coal, nuclear, renewables).

Third,  Entelligent  scores  companies  based on sensitivity of share-price (or total returns  with dividends reinvested) to historical and forecast energy prices  using machine learning algorithms. Companies with higher sensitivity to energy volatility  are rated as  higher risk by  the  E-Score.  

Fundamentally, the E-Score  translates  future risk to  global climate change scenarios into present-day  portfolio guidance.  

 

Where does Entelligent get it’s financial data?   


Financial data is sourced from FactSet, a global leader in financial information. Entelligent leverages entity and security-level data including price returns, total returns, revenue, market valuation, GICS industry groups, MSCI region codes, index/fund memberships, and a variety of security identifiers.


Where does Entelligent get it’s climate data?    


Entelligent derives its climate data from an IAM by simulating energy transitions arising from a range of  policy, technology,  social  and economic outlooks.

Multiple  future  scenarios are evaluated,  ranging from  unmitigated  carbon growth to aggressive  climate change mitigation.

Our work began with the Rapid Overview and Decision Support  model (En- ROADS; published by Climate Interactive) and is expanding to evaluate multiple IAMs.

 

How does Entelligent establish climate senarios? 


Entelligent’s  scenario simulations yield future climate and energy estimates.  Scenarios  are calibrated to  select reference scenarios from the  United Nations Intergovernmental Panel on Climate Change (UN-IPCC).

Our strategy combines output from the following climate scenarios:

  • Carbon minimum (MIN) impact scenario
  • Carbon maximum (MAX) impact scenario
  • Business as usual (BAU) carbon impact scenario

Key scenario factors include carbon tax, energy source subsidies, land use change, negative emission technologies, rate of improvement of new capital, electrification of transport, population growth and per-capita GDP, among many others.

 

Are Entelligent’s E-Score ratings standard or bespoke?


Entelligent  issues standard ratings for  publicly listed  equities  across multiple channels, including  FactSet.  These ratings are based on consensus scenarios developed by  our  advisory panel of climate scientists.  Clients may also request  a  custom scenario  elicitation to  align with stakeholder commitments (e.g.  Paris compliance)  or differing  world views  (e.g.  slower  GDP  growth,  faster adoption of renewables, a higher  carbon  price).  E-Scores that result from custom scenario elicitation will be unique to that client.