ABOUT THE COMPANY ASSESSMENTS
Focus companies have been assessed on each of the Net-Zero Company Benchmark’s 10 disclosure indicators and their related sub-indicators and metrics, which collectively reflect the overall engagement goals of Climate Action 100+. Capital allocation assessment indicators complement the disclosure indicators by providing further insights into the upstream oil and gas, electric utilities, and automotive sectors. These frameworks will evolve with future iterations.
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DISCLOSURE ASSESSMENT INDICATORS
Assessments of the company’s publicly disclosed information against each indicator, sub-indicator, and metric provide information on the company’s alignment with the Climate Action 100+ goals.
The disclosure assessment indicators reflect publicly disclosed information as of January 22, 2021.
The Transition Pathway Initiative (TPI), supported by its research and data partners the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE) and FTSE Russell, conducted the company disclosure research and analysis. InfluenceMap provided independent analysis of the company’s corporate climate lobbying practices (indicator 7).
The necessary time frame for companies to achieve net-zero GHG emissions differs depending on the sector.
Contingency: Metric 1.1b cannot be ‘Yes’ unless 1.1a is also ‘Yes’.
See Scope 3 Application for details.
Contingency: Metrics 2.2a and 2.2b cannot be ‘Yes’ unless sub-indicator 2.1 is also ‘Yes’. Sub-indicator 2.3 is not currently conditional on 2.1 or 2.2. Therefore, it is possible to have ‘No’ on 2.1 but ‘Yes’ on 2.3. Respectively, 2.1/2.2a/2.2b will be ‘Yes’ if 3.1/3.2a/3.2b are ‘Yes’ and are net-zero targets (i.e. net zero will be achieved in the medium term).
The intent is for the long-term target to be aligned with a trajectory to achieve the Paris Agreement goal of limiting global temperature increase to 1.5°C with low or no overshoot (equivalent to IPCC Special Report on 1.5° Celsius pathway P1 or net-zero emissions by 2050). If a company’s current emissions intensity is aligned with the assessment scenario used (or will be aligned in the short or medium term), it is assumed that the intensity will continue to be aligned in the long term.
This sub-indicator is based on TPI’s Carbon Performance methodologies which applies the Sectoral Decarbonisation Approach (SDA), a science-based method for companies to set GHG reduction targets necessary to stay within reference climate scenarios. Details related to this company’s Carbon Performance assessment conducted by TPI may be viewed here.
Contingency: Metrics 3.2a and 3.2b cannot be ‘Yes’ unless sub-indicator 3.1 is also ‘Yes’. Sub-indicator 3.3 is not currently conditional on 3.1 or 3.2. Therefore, it is possible to have ‘No’ on 3.1 but ‘Yes’ on 3.3. Respectively, 3.1/3.2a/3.2b will be ‘Yes’ if 4.1/4.2a/4.2b are ‘Yes’ and are net-zero targets (i.e. net zero will be achieved in the short term).
The intent is for the medium-term target to be aligned with a trajectory to achieve the Paris Agreement goal of limiting global temperature increase to 1.5°C with low or no overshoot (equivalent to IPCC Special Report on 1.5° Celsius pathway P1 or net-zero emissions by 2050). If a company’s current emissions intensity is aligned with the assessment scenario used (or will be aligned in the short term), it is assumed that the intensity will continue to be aligned in the medium term.
This sub-indicator is based on TPI’s Carbon Performance methodologies which applies the Sectoral Decarbonisation Approach (SDA), a science-based method for companies to set GHG reduction targets necessary to stay within reference climate scenarios. Details related to this company’s Carbon Performance assessment conducted by TPI may be viewed here.
Contingency: Metrics 4.2a and 4.2b cannot be ‘Yes’ unless sub-indicator 4.1 is also ‘Yes’. Sub-indicator 4.3 is not currently conditional on 4.1 or 4.2. Therefore, it is possible to have ‘No’ on 4.1 but ‘Yes’ on 4.3.
The intent is for the short-term target to be aligned with a trajectory to achieve the Paris Agreement goal of limiting global temperature increase to 1.5°C with low or no overshoot (equivalent to IPCC Special Report on 1.5° Celsius pathway P1 or net-zero emissions by 2050). If a company’s current emissions intensity is aligned with the assessment scenario used, it is assumed that the intensity will continue to be aligned in the short term.
This sub-indicator is based on TPI’s Carbon Performance methodologies which applies the Sectoral Decarbonisation Approach (SDA), a science-based method for companies to set GHG reduction targets necessary to stay within reference climate scenarios. Details related to this company’s Carbon Performance assessment conducted by TPI may be viewed here.
Contingency: Sub-indicator 5.1 is contingent on sub-indicators 2.1, 2.2 (long-term targets) and 3.1, 3.2 (medium-term targets) being ‘Yes’. Sub-indicator 5.1 is not conditional on 2.3 and/or 3.3 (net-zero alignment), i.e. 5.1 can be ‘Yes’ and 2.3/3.3 ‘No’.
The use of offsetting or carbon credits should be avoided and limited, if at all applied. Offsetting or ‘carbon dioxide removal’ should not be used by companies operating in sectors where viable decarbonisation technologies exist. For example, offsetting would not be considered credible if used to offset emissions for a coal-fired power plant because viable alternatives exist to coal-fired power plants.
Examples of key elements include: changing technology or product mix, supply chain measures, R&D spending, etc.
Currently sub-indicator 5.2 and related metrics only apply to focus companies headquartered in the European Union (E.U.).
The assessment will leverage the European Union’s Green Taxonomy criteria on ‘turnover’ (or revenues) for companies headquartered in the E.U. The criteria used to assess non-E.U. companies will be an ongoing area of development as part of broader discussions on the use of green revenue classification systems and regional taxonomies.
For focus list companies in the upstream oil and gas, electric utilities and automotive sectors, a supplementary assessment is available. See the Capital Allocation Assessment Indicators for further details on companies in these sectors.
Contingency: Metric 6.2a cannot be ‘Yes’ if either 6.1a or 6.1b are not ‘Yes’.
Contingency: Metric 7.3b cannot be ‘Yes’ unless metric 7.3a is also ‘Yes’. (i.e. 7.3.b should not be able to be ‘Yes’ unless 7.3.a is also ‘Yes’).
InfluenceMap provides detailed Paris-aligned analysis of corporate climate lobbying independently of the Climate Action 100+ Net-Zero Company Benchmark.
See the individual company profile here.
Explore InfluenceMap’s full ranking of Climate Action 100+ focus companies.
Contingency: Metric 8.2b is contingent on indicators 2.1 or 3.1 or 4.1 being ‘Yes’.
The company discloses evidence of board or board committee oversight of the management of climate change risks via at least one of the following:
- There is a C-suite executive or member of the executive committee that is explicitly responsible for climate change (not just sustainability performance) and that executive reports to the board or a board level committee, and/or;
- The CEO is responsible for climate change AND he/she reports to the board on climate change issues, and/or;
- There is a committee (not necessarily a board-level committee) responsible for climate change (not just sustainability performance) and that committee reports to the board or a board-level committee.
The company has named a position at the board level with responsibility for climate change, via one of the following:
- A board position with explicit responsibility for climate change, or;
- CEO is identified as responsible for climate change, if he/she sits on the board.
Sub-indicator 8.3 and its underlying metrics will not be assessed in the current cycle.
Contingency: Metric 10.2b cannot be ‘Yes’ unless metric 10.2a is also ‘Yes’.
Notes
*In the absence of a credible 1.5°C scenario, companies have been measured against a best-available below 2°C scenario. Company assessments will be adjusted when a credible 1.5°C scenario becomes available.
CAPITAL ALLOCATION ASSESSMENT INDICATORS
These indicators analyse companies’ capital expenditures (CAPEX) and economic output from legacy fossil fuel and prospective carbon-emitting assets relative to a range of climate change scenarios. The analysis gives investors additional insights on the relative adequacy and alignment of company actions with the goals of the Paris Agreement. These independent analyses, which correspond with company disclosures related to Disclosure Indicator 6, are included for upstream oil and gas, electric utilities, and automotive companies. Capital allocation analyses for companies in other sectors are expected to be developed in the future. The following Capital Allocation Assessment Indicators apply to focus list companies in the electric utilities sector.
The Carbon Tracker Initiative (CTI) and 2 Degrees Investing Initiative (2Dii) conducted the company disclosure research and analysis. Indicators 1-4 are assessed using CTI modelling, which is based on asset level coal generation data as of July 2019 and natural gas data as of December 2019. Public disclosure and asset ownership information is assessed as of January 2021. Indicators 5-6 are assessed by 2Dii and reflect the company’s physical assets as of December 31, 2020.
- 1COAL PHASE-OUT: Has the company announced a full phase-out of coal units by 2040 that is consistent with Carbon Tracker Initiative's interpretation of the IEA’s Beyond 2°C Scenario?
This indicator identifies the comprehensiveness of the company’s announced retirement schedule for its coal plants based on disclosed retirement dates and Carbon Tracker’s proprietary asset level least cost scenario analysis against the IEA’s B2DS. The purpose is to show the scope and pace of a company’s coal plant retirements.
These results are rated from 1-4, as follows:
(1) Companies with an announced full retirement of their coal fired generation fleet consistent with CTI’s interpretation of a Paris-aligned pathway;
(2) Companies with full retirement which is not yet consistent with a Paris-aligned pathway;
(3) Partial retirement of the fleet;
(4) Unannounced/ insufficient data on retirements.This indicator identifies the comprehensiveness of the company’s announced retirement schedule for its coal plants based on disclosed retirement dates and Carbon Tracker’s proprietary asset level least cost scenario analysis against the IEA’s B2DS. The purpose is to show the scope and pace of a company’s coal plant retirements.
These results are rated from 1-4, as follows:
(1) Companies with an announced full retirement of their coal fired generation fleet consistent with CTI’s interpretation of a Paris-aligned pathway;
(2) Companies with full retirement which is not yet consistent with a Paris-aligned pathway;
(3) Partial retirement of the fleet;
(4) Unannounced/ insufficient data on retirements. - Announced full retirement of their coal fired generation fleet consistent with CTI’s interpretation of a Paris-aligned pathway*
- 2GAS PHASE-OUT: Has the company announced a full phase-out of natural gas units by 2050 that is consistent with Carbon Tracker Initiative's interpretation of the IEA’s Beyond 2°C Scenario?
This indicator identifies the comprehensiveness of the company’s announced retirement schedule for its natural gas plants based on disclosed retirement dates and Carbon Tracker’s proprietary asset level least cost scenario analysis against IEA’s B2DS. The purpose is to show the scope and pace of a company’s natural gas plant retirements.
These results are rated from 1-4, as follows:
(1) Companies with an announced full retirement of their coal fired generation fleet consistent with CTI’s interpretation of a Paris-aligned pathway;
(2) Companies with full retirement which is not yet consistent with a Paris-aligned pathway;
(3) Partial retirement of the fleet;
(4) Unannounced/ insufficient data on retirements.This indicator identifies the comprehensiveness of the company’s announced retirement schedule for its natural gas plants based on disclosed retirement dates and Carbon Tracker’s proprietary asset level least cost scenario analysis against IEA’s B2DS. The purpose is to show the scope and pace of a company’s natural gas plant retirements.
These results are rated from 1-4, as follows:
(1) Companies with an announced full retirement of their coal fired generation fleet consistent with CTI’s interpretation of a Paris-aligned pathway;
(2) Companies with full retirement which is not yet consistent with a Paris-aligned pathway;
(3) Partial retirement of the fleet;
(4) Unannounced/ insufficient data on retirements. - Unannounced/ insufficient data on retirements*
- 3ALIGNMENT OF COAL PHASE-OUT: The percentage of the company's operating and planned coal capacity that is aligned with Carbon Tracker Initiative's interpretation of IEA’s Beyond 2°C Scenario. N/A signifies that no coal plants were identified.
This indicator uses Carbon Tracker’s least cost methodology to identify the relative alignment of the company’s coal capacity retirement compared to CTI’s interpretation of IEA’s B2DS where perfect alignment = 100%. (In parentheses, we identify what percentage of the company’s coal units have been assigned a retirement date aligned with B2DS.)
This indicator uses Carbon Tracker’s least cost methodology to identify the relative alignment of the company’s coal capacity retirement compared to CTI’s interpretation of IEA’s B2DS where perfect alignment = 100%. (In parentheses, we identify what percentage of the company’s coal units have been assigned a retirement date aligned with B2DS.)
- 100% of capacity (100% of units)
- 4ALIGNMENT OF GAS PHASE-OUT: The percentage of the company's operating and planned gas capacity that is aligned with Carbon Tracker Initiative's interpretation of IEA’s Beyond 2°C Scenario. N/A signifies that no gas plants were identified.
This indicator uses Carbon Tracker’s least cost methodology to identify the relative alignment of the company’s gas capacity retirement plan compared to CTI’s interpretation of IEA’s B2DS where perfect alignment = 100%. (In parentheses, we identify what percentage of the company’s gas units have been assigned a retirement date aligned with B2DS.)
This indicator uses Carbon Tracker’s least cost methodology to identify the relative alignment of the company’s gas capacity retirement plan compared to CTI’s interpretation of IEA’s B2DS where perfect alignment = 100%. (In parentheses, we identify what percentage of the company’s gas units have been assigned a retirement date aligned with B2DS.)
- 43% of capacity (0% of units)
- 5Assessment of the company's 2021 technology mix vs. the sector average.
This indicator assesses the technology mix of the company in 2021 compared to the market in 2021. The analysis is conducted on the technology level, meaning 2Dii compares the technology share of the company with the technology share of the sector average. For example, if the market’s power technology mix consists of 20% of coal power, while the company’s technology mix consists for 17% of coal power, then the company is ‘ahead’ of the market, implying that it’s greener than the market in terms of coal power.
Possible assessment outcomes include: Behind (>15% negative deviation); Slightly Behind (5-15% negative deviation); Aligned (+ or – 5%); Slightly Ahead (5-15 % positive deviation); or, Ahead (>15% positive deviation).
This indicator assesses the technology mix of the company in 2021 compared to the market in 2021. The analysis is conducted on the technology level, meaning 2Dii compares the technology share of the company with the technology share of the sector average. For example, if the market’s power technology mix consists of 20% of coal power, while the company’s technology mix consists for 17% of coal power, then the company is ‘ahead’ of the market, implying that it’s greener than the market in terms of coal power.
Possible assessment outcomes include: Behind (>15% negative deviation); Slightly Behind (5-15% negative deviation); Aligned (+ or – 5%); Slightly Ahead (5-15 % positive deviation); or, Ahead (>15% positive deviation).
- 5aCoal
- Ahead
- 5bOil
- Ahead
- 5cGas
- Behind
- 5dNuclear
- Behind
- 5eHydro
- Behind
- 5fRenewables (e.g., wind, solar)
- Ahead
- 6Assessment of IEA scenario alignment for each technology based on 2026 forecasts. Companies’ trajectories for each technology are assessed as being below a Beyond 2°C Scenario (B2DS <1.75C), below a Sustainable Development Scenario (SDS 1.75C-2C), above a Sustainable Development Scenario (SDS >2C), or significantly above a Sustainable Development Scenario (SDS >3C).
This indicator analyses the company’s planned capacity additions and retirements (for power companies) with IEA scenarios and identifies the scenario pathway to which it most closely corresponds per technology. For example, it assesses whether the company is planning to build more windmills and solar farms, and to retire coal plants, and with which scenario that is most closely aligned.
This indicator analyses the company’s planned capacity additions and retirements (for power companies) with IEA scenarios and identifies the scenario pathway to which it most closely corresponds per technology. For example, it assesses whether the company is planning to build more windmills and solar farms, and to retire coal plants, and with which scenario that is most closely aligned.
- 6aCoal
- Significantly above SDS >3
- 6bOil
- Significantly above SDS >3
- 6cGas
- Below SDS 1.75-2
- 6dNuclear
- Below B2DS <1.75C
- 6eHydro
- Significantly above SDS >3
- 6fRenewables (e.g. wind, solar)
- Significantly above SDS >3
Notes
The primary sector classification for this company is oil and gas distribution. However, this company is a diversified conglomerate that includes operations in the electric utilities sector.
*Carbon Tracker Initiative’s power and utility generation capacity retirement analysis and methodology is described most recently in “Making it mainstream – CA100+ power utility profiles” Carbon Tracker (2019). An update will be published in March/April 2021.
More information on the metrics and other tools on offer by 2DII can be found here.