Data consistency for an individual firm across various ESG data providers is almost perfect for Scope 1 emissions (direct emissions from owned or controlled sources); it is still very high for Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company), but it drops dramatically for Scope 3 (all other indirect emissions that occur in a company’s value chain).5 The latter are often a very important source of emissions, but their calculation presents formidable technical challenges because it requires vast amounts of data on several different phenomena, such as e.g.
A particular problem with Taylor-type rules is that we do not know the equilibrium real federal funds rate and, whatever it might be at one point in time, it likely varies over time.