Getlink (Paris:GET), the operator of Eurotunnel and concessionaire of the Channel Tunnel infrastructure, has published a unique indicator called the Decarbonization Margin, that claims to bridge the gap between finance and climate protection. It measures Getlink’s capacity to adapt to the increasing cost of greenhouse gas emissions
It is calculated by removing future carbon costs in emission Scopes 1,2 and 3 from the consolidated EBITDA. This essentially calculated a future carbon cost and allows the company to create a transparent forecast and connects it to financial performance.
Yann Leriche, Getlink CEO, stated: “Carbon emissions are currently considered to be “free” of charge, but for our Group the production of a financial measure which takes account of future carbon costs enables us to learn important lessons regarding the role we can play in climate transition whilst providing a perspective on the sustainability of our ambitions for growth.”
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For 2022 the Decarbonization Margin (linked presentation available in French only) for the Getlink group reached a level of 97% of EBITDA, based on a carbon price of €197/tonne ($248/ton), as recommended by the Environment Protection Agency in the U.S. According to the company, this high level shows that the low emissions levels from the its activities.
The indicator can also be used as a measure of how companies adapt to policy requirements on state level, be it European initiatives like the Fit for 55 plan or the UK’s Build Back Greener. Both of these policies use carbon pricing in how they calculate impact. The Decarbonization Margin can be used to demonstrate the direct impact of policies like this on the financial performance of companies.