Sustainability metric

Why was the NEC metric created?

The NEC metric was created in response to the absence of a holistic metric that enabled economic actors to assess the full environmental impact of a product, service or company. Because climate, biodiversity and resources are interlinked, they need to be considered together. Limited by existing metrics that only measured carbon, companies and investors were in need of an alternative.

To this end, we built the most reliable, scientifically robust and transparent metric possible in response to the absence of transparent, trustworthy information provided by major ESG data providers. We conceived the NEC metric so that it is not only easy for companies and investors to use, but also to be a relative system of measurement that allows cross-comparison between products, services, companies and sectors based on their sustainability performance.

How to read a NEC score?

For a dedicated function or service,

Destructors are activities that damage the most natural capital, with a score close to -100%.

0% corresponds to the global average environmental impact.

Contributors are activities that have the least impact on the environment, with a score close to +100%.

Some examples for Electricity production

From production to distribution, we look at the impact on the entire value chain, we aggregate per kWh of electricity produced and distributed:

The impact on climate: NEC considers the amount of GHG emissions (mainly emitted at the combustion of raw materials.)

Biodiversity impacts: Electricity production can severely impact the habitat of some species. This mostly occurs during the production and construction phase of power plants (e.g. the construction of hydraulic dams). This indicator takes into account, among others, land use, acidification, ecotoxicity, eutrophication.

The impact on air quality: in addition to CO2, fuel combustion releases airborne pollutants. Furthermore, volatile organic compounds (VOC) contribute to the photochemical formation of atmospheric ozone.

Resources depletion and waste generation: electricity production produces waste => (1) During the primary production phase for fossil fuels (2) during the component construction phase for renewable energies (e.g. wind turbines) (3) during the dismantlement phase of electric power plants (4) during the electricity production phase mainly for nuclear and for geothermal (deep earth components caught inside the steam).

Coal

Oil

Natural gas

Nuclear

Geothermic

Rooftop photovoltaic

Wind

-100% -63% 0% +21% +36% +72% +86% +100%

-100%

Coal

-63%

Oil

0%

+21%

Natural gas

+36%

Nuclear

+72%

Geothermic

+86%

Rooftop photovoltaic

+100%

Wind

What makes the
NEC metric different?

HOLISTIC

It goes beyond carbon by assessing all environmental issues: biodiversity, climate and resources.

LIFECYCLE ANALYSIS

It analyses the environmental impact of a product or service throughout its life cycle. From cradle to grave.

EASILY UNDERSTANDABLE

No waffling or vague concepts. A rigorous and demanding scientific methodology… expressed in a simple scoring system that is easy for all stakeholders to understand, ranging from -100% to +100%.

FINAL USE

Following a “value chain” approach, it looks not only at how a product or service is made, but also to whom it is sold. This allows the NEC to examine the full environmental impact.

RELATIVE MEASURE

It was designed to enable cross-sectorial comparisons of any economic activity.

GLOBAL

It can be applied to any region, company size, sector and any class of asset.

What are the pillars of the methodology?

Transparent

It’s not optional, it’s proof of credibility. We give free access to our methodology.

Scientific

It uses quantifiable physical data from peer-reviewed, academic sources, third-party studies and certifying bodies.

Activity-based

It starts with an analysis of the environmental impacts of each product and service. It then aggregates the different business units at company level. By way of aggregation, it is then possible to analyse NEC scores at portfolio or index level.