Climate action scoring system methodology

"Felipe, are there other options beyond #SBTi? Why don't I hear about other standards? I've been receiving this question frequently in conversations with my customers, so I thought it would be helpful to share some insights here. When it comes to driving corporate climate action, several initiatives provide frameworks and methodologies. Here’s a comparison of some key players in the field: "The leader" - Science Based Targets initiative (SBTi): - A collaboration of institutions aimed at increasing corporate ambition on climate action. - Methodology: Independent assessment of companies’ Scope 1, 2, 3 targets, classified into three categories. - Adoption: ~1,200 companies, including Bayer, thyssenkrupp, Saint-Gobain, and PSA. Transition Pathway Initiative (#TPI): - A global initiative led by asset owners and supported by asset managers. - Methodology: Assessment based on publicly available information and classification into five levels. - Adoption: ~370 companies, such as Tesla, P&G, and Ford. X-Degree Compatibility (#XDC): - A science-based climate metric to quantify a company’s contribution to global warming. - Methodology: Emission and economic data are used to calculate XDC value and emission reduction pathways. - Adoption: >30 companies, including BASF, Adidas, and E.ON. The 1.5°C Business Playbook: - An initiative that brings together technology innovators, scientists, companies, and NGOs. - Methodology: Proposed pathway based on the carbon law, which involves halving carbon emissions every decade. - Adoption: No calculation/categorization of companies. ISO Standard on Climate Action (e.g., ISO 14064-1): - Provides guidelines and standards for quantifying and reporting greenhouse gas (GHG) emissions and removals. - Methodology: Focuses on organizational and project-level GHG quantification, reporting, and verification. - Adoption: Widely recognized and adopted globally across various industries for standardized reporting and compliance. ------ Top 3 Key Differences: ------ 1- While SBTi, TPI, and XDC provide specific frameworks for setting and assessing climate targets, the 1.5°C Business Playbook offers a broader pathway approach, and ISO focuses on standardized reporting. 2- Methodology: SBTi and TPI rely on classifications, XDC uses a quantitative metric, the 1.5°C Business Playbook is based on the carbon law, and ISO provides guidelines for GHG quantification and reporting. 3- Adoption: SBTi and TPI have broader adoption among companies, while XDC and the 1.5°C Business Playbook have more specialized use cases. ISO standards are globally recognized and widely adopted across industries. Choosing the right framework depends on your organization's specific needs, whether it's setting science-based targets, aligning with asset managers, quantifying climate impact, following a broad decarbonization pathway, or adhering to standardized reporting. How is your organization navigating these frameworks in its sustainability journey?

🌍 CDP 2025 Climate Change Scoring Methodology – Key Highlights CDP has released its 2025 Full Corporate Scoring Methodology for Climate Change, bringing a more integrated and sharper approach to evaluating how companies manage climate-related dependencies, impacts, risks, and opportunities. Here are the top takeaways companies should know: 1️⃣ Integrated Questionnaire Structure CDP has integrated Climate, Water, and Forests into a single disclosure — enabling holistic ESG reporting while still scoring each theme separately. 2️⃣ Sector-Specific Scoring With detailed criteria across high-impact sectors (AC, CE, OG, FS, EU, MM, CH, etc.), the 2025 methodology offers more accurate, sector-tailored benchmarking. 3️⃣ Strong Focus on Governance & Strategy Modules emphasize: Board & management oversight Environmental policies & incentives Scenario analysis & transition plans Companies must demonstrate clear leadership, accountability, and strategic alignment. 4️⃣ Enhanced Performance Expectations Module 7 pushes for: Transparent Scope 1, 2 & 3 emissions Detailed intensity metrics Low-carbon R&D, CAPEX alignment, and product-level emissions Clear tracking of climate-related initiatives 5️⃣ Value Chain Mapping Becomes Critical Scoring rewards transparent mapping of upstream, direct operations, and downstream activities — essential for Scope 3 readiness. 6️⃣ Leadership-Level Scoring is Tougher To reach A/A-level performance, organizations must: Integrate climate criteria across enterprise risk management Demonstrate quantitative + qualitative sustainability assessments Cover multiple risk types (physical, transition, market, policy, technology) Show evidence of climate-related opportunities tied to growth 📌 Why this matters: With investors, regulators, and supply-chain partners demanding more robust climate transparency, CDP 2025 is not just a reporting framework — it’s a strategic playbook for climate maturity.

🌍 CDP Reporting 2025: What You Need to Know & How to Prepare In a world moving toward mandatory ESG disclosures, CDP reporting has become the global benchmark for environmental transparency. If you're looking to strengthen your sustainability strategy, now’s the time to get ready. Here’s a practical guide to what CDP reporting is, who needs to disclose, and how to approach it effectively for the 2025 cycle. 👇 📌 What is CDP Reporting? 🌱 CDP (formerly Carbon Disclosure Project) is a global disclosure system for companies, cities, and regions to report their climate-related data. 🧩 Disclosures focus on GHG emissions, climate risks, targets, water, forests, plastics, and biodiversity. 🏢 In 2023, 23,000+ organisations disclosed through CDP, including nearly 75% of the world’s largest listed companies. 🏦 CDP scores are used by investors, banks, customers, and ESG platforms to assess performance. 💡 Who Should Report? 📥 Companies receiving formal CDP disclosure requests from investors or buyers. 🚀 SMEs and mid-market firms wanting to stay ahead of regulation or demonstrate ESG leadership. 🔍 Suppliers in value chains facing sustainability due diligence requirements. 💼 Private companies preparing for future CSRD/ISSB compliance. 🧭 CDP Reporting Process: Step-by-Step - Register & Access Your Questionnaire (sector-specific) - Review Updated Guidance – Understand the new scoring methodology - Collect and Validate Data – Scope 1, 2, and 3 emissions, governance, risks, targets - Submit via the Online Response System (ORS) - Track Results & Feedback – Learn from your score to improve next year 📊 CDP Scoring Levels Explained: - D (Disclosure): Basic reporting, no action yet - C (Awareness): Understanding risks, limited action - B (Management): Targets and actions in place - A (Leadership): Science-based targets, supply chain engagement, policy alignment - F is assigned to companies that fail to respond when requested. 🗓️ Key Dates for the 2025 CDP Cycle: January 2025 – New guidance and questionnaires released Week of 28 April – ORS opens Week of 16 June – Official reporting window begins Week of 15 September – Submission deadline for 2025 cycle Week of 17 November – Final submission cut-off 🔍 Why CDP Reporting Matters: ✅ Enhances ESG ratings & investor confidence ✅ Supports CSRD, ISSB, TCFD alignment ✅ Drives internal sustainability action & strategy ✅ Meets rising procurement and customer expectations ✅ Avoids reputational risk by staying transparent & proactive 💬 Are you planning to disclose through CDP this year? Let’s connect and share experiences. 👇 𝐄𝐦𝐚𝐢𝐥: sachin.sharma@sgs.com or 𝐌𝐞𝐬𝐬𝐚𝐠𝐞: Sachin Sharma #CDP2025 #CarbonDisclosure #SustainabilityLeadership #Scope3Emissions #ESGReporting #ClimateDisclosure #NetZeroTargets #GHGAccounting #SustainableBusiness #CSRDReady #CDPScore #CDPQuestionnaire #GreenTransition #SustainableProcurement #ESGCompliance #TransparencyMatters #ClimateRisk #Decarbonisation

Building ESG: Understanding a Company’s Climate Impact: The Carbon Performance ________________________________________ Carbon performance is a critical metric used to assess a company's environmental impact and its commitment to sustainability. It's a forward-looking evaluation based on a company's publicly disclosed emissions data. This data is then used to assign a categorical score that reflects how well a company's emissions align with the goals of the Paris Agreement. Understanding Carbon Performance Scores The Transition Pathway Initiative (TPI) has developed a scoring system that assigns one of five categories to a company based on its carbon performance: * 1.5°C: This is the best possible score, indicating that a company's emissions reduction trajectory is aligned with the most ambitious goal of the Paris Agreement * 2°C: This score suggests that a company's emissions reduction plans are consistent with limiting global warming to well below 2 degrees Celsius * 2.7°C: This is a score assigned to companies whose emissions reduction targets are somewhat aligned with the Paris Agreement goals, but may not be ambitious enough to achieve them. * >2.7°C: This score indicates that a company's emissions reduction trajectory is not currently aligned with the goals of the Paris Agreement, and significant improvements are needed. * 3°C: This is the worst possible score, assigned to companies with emissions reduction plans that are insufficient to avoid dangerous levels of global warming. - The TPI evaluation transition plan of respective companies/sector by considering two key dimensions: * Management Quality: This evaluates a company's governance around greenhouse gas emissions, its risk management practices related to climate change, and the opportunities it sees in the transition to a low-carbon economy. * Carbon Performance: This dimension assesses how a company's emissions reduction targets align with the different scenarios outlined in the Paris Agreement. The TPI uses sector-specific benchmarks and emissions intensity to make these comparisons. - A Valuable Tool for Investors https://lnkd.in/dAV9RuxQ The TPI provides a free online tool that allows users to compare the carbon performance of companies across different sectors. Share your thoughts and experiences in the comments below! Please feel free to share (Disclaimer: Views are personal, should not be related to organisations view) #buildingEsg #circulareconomy #sustainablefinance #esgreporting #esgstrategy #esgrisk #climaterisk #climatechangeaction #climaterisks #india #emissions #esgratings #esg #cop28 #greenertogether #SDGs #sustainability #business #csr