Raul Leote De Carvalho (BNP Paribas) - EDHEC Speaker Series
Raul Leote De Carvalho, Deputy Head of the Quantitative Research Group at BNP Paribas, gives a seminar on "Estimating Corporate Carbon Emissions with Machine Learning".
As of 2022, greenhouse gases (GHG) emissions reporting and auditing are not yet compulsory for all companies. We propose a machine learning-based model to estimate scope 1 and scope 2 GHG emissions of companies not yet reporting them. The model is designed to be transparent, is able to estimate GHG emissions for a large universe of companies and shows good out-of-sample performance. Unlike mainstream approaches, which tend to construct one model for each industry, we construct one single global model that uses industries as a factor. This addresses the problem of lack of breadth or lack of reported data in some industries and generates practical results even for industries where other approaches have failed.