Assessing companies on their Carbon Performance

What is the Transition Pathway Initiative’s (TPI’s) Carbon Performance assessment and what can it show us? The TPI team provide insight into Carbon Performance and highlight the benefits of the assessment to investors.

Thanks for joining. This is part of a series of videoson the Transition Pathway Initiative or TPI for short.I'm Simon Dietzs, research director ofthe TPI Centre at London School of Economics,and I'm joined by Ali Amin,Carbon Performance Research Project Managerat the TPI Centre.Now, at the TPI Centre,we assess companies in two ways,management quality and carbon performance.You can find another video on management quality.This video is on our carbon performance data set.Ali, what's our carbon performance data set all about?So carbon performance is one ofthe two pillars of TPI's online corporate tool.What it does is essentially assessescompany's existing emissions trajectoryand future decarbonization commitments.Simply put, it tells users whethera company's current targets arein line with the goals of the Paris agreement.And how do we translate the goals of the Paris agreementinto benchmarks that we can compare companies with?Sure. So to assessthe company's goals against the Paris agreement,we construct sector specific benchmarksrecognizing that different sectorsface different challenges.So we currently cover 11 sectors,as you can see on the right hand side of the slide.These cover hard to base sectorslike oil and gas, steel, cement,and all the way to food producerswhich go under the radar,but are equally important.So one of the main design principles that we see here iscovering the most material emissions in a given sector.The way that we do this is we usemodeling work such as those fromthe International Energy Agency.And that's the benchmark side of the equation.What about the company side?How do we collect the company data?So company data is collected andall the emissions intensitypathways are created in house.So what we do is we go through hundreds of reports,looking at the company's reported emissions,activity, and targets, and match these tomake sure that these are consistentwith the boundaries of our benchmarks.At the end of this, we providea detailed document to the companies,outlining exactly where the informationwas taken from and the detailcalculation steps we took in order toproject their emissions intensity pathway.And when we take the benchmarks andput them together with the company data,What sort of questions can we answer?So when we assess the companyemissions intensity pathways with the benchmarks,we assess whether this isabove or below a given benchmark.So for example, you can see inthe slide Company A being aboveall of the benchmarks in all three time frames,which is the short term, 2027,medium term, 2035, and the long term, 2050.When you compare this against Company C,which is highlighted in green,this is below all of the benchmarksand included matches the 1.5 degree,which is the most ambitious ofthe benchmarks in all three time frames.And when investors go ontothe TPI online tool tolook at the carbon performance data.Can you give us a sense of what the results look like?Sure. This slide summarizesthe year in 2050 for all sectors.You can see here that we provide for each sectora carbon forms alignment breakdownwith each of the relevant benchmarks.For example, you can see here that 41% ofthe steel companies were aligned with the1.5 degree benchmark in 2050,whereas this drops down to12% for the oil and gas sector.So you can find sector specific summariesalong with the company pathways,along with the alignment scores or on TPI website.Thanks, All. This has beenan overview of our carbon performance data set.For more information aboutour carbon performance methods and data,check out the TPI website where you can find the data,a series of reports, and explainers.You can also check out more about the TPI inthe set of videos we've been recording. Thank you.

Prof. Simon Dietz, Professor of Environmental Policy, Geography and Environment Department - Research Director, TPI Centre, London School of Economics
Ali Amin, Analyst, TPI Centre