ESG and Sustainable Finance
Interpret carbon intensity
Can carbon intensity improve while total emissions rise?
Carbon intensity divides emissions by a measure such as output or revenue. Absolute emissions measure total volume.
Intensity = tonnes of CO₂e ÷ activity measure
Divide total emissions by output. 110 tonnes ÷ 125 units = 0.88 tonnes per unit. Total emissions rose even though emissions per unit fell.
Emissions increase from 100 to 110 tonnes while production rises from 100 to 125 units. Intensity falls from 1.00 to 0.88 tonnes per unit.
Divide total emissions by output. 110 tonnes ÷ 125 units = 0.88 tonnes per unit. Total emissions rose even though emissions per unit fell.
What is true in the example?