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Generic methodology | ACT Initiative | Version 1 | page 2

Contents
1.

INTRODUCTION........................................................................................................... 6

2.

PRINCIPLES ................................................................................................................. 7

3.

SCOPE .......................................................................................................................... 7
3.1. SCOPE OF THE DOCUMENT........................................................................................................ 7
3.2. SCOPE OF THE ACT GENERIC METHODOLOGY ........................................................................ 7

4.

BOUNDARIES............................................................................................................... 94.1. REPORTING BOUNDARIES ....................................................................................................... 10
4.2. RATIONALE ............................................................................................................................... 13

5.

CONSTRUCTION OF THE DATA INFRASTRUCTURE .............................................. 13
5.1. DATA SOURCES ........................................................................................................................ 13
5.2. COMPANY DATA REQUEST ...................................................................................................... 14
5.3. PERFORMANCE INDICATORS ................................................................................................... 15
TARGETS (WEIGHTING: 15%) ........................................................................................................... 17
GE 1.1 ALIGNMENT OF DIRECT EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%) .........................17



GE 1.2 ALIGNMENT OF UPSTREAM EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%) ..................22



GE 1.3 ALIGNMENT OF DOWNSTREAM EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%) ............27



GE 1.4 TIME HORIZON OF TARGETS (WEIGHTING: 2%) .....................................................................................30



GE 1.5 ACHIEVEMENT OF PAST AND CURRENT TARGETS (WEIGHTING: 1%) ..............................................34

MATERIAL INVESTMENTS (WEIGHTING: 0 - 35%) ........................................................................... 38
GE 2.1 TREND IN PAST EMISSIONS INTENSITY FROM MATERIAL INVESTMENT (WEIGHTING: 0-8,75%) .38



GE 2.2 TREND IN FUTURE EMISSIONS INTENSITY FROM MATERIAL INVESTMENT (WEIGHTING: 0-26,25%)
41



GE 2.3 SHARE OF LOW-CARBON CAPEX (WEIGHTING: 0-8.75%).....................................................................46



GE 2.4 LOCKED-IN EMISSIONS (WEIGHTING: 0-17.5%) ......................................................................................47

INTANGIBLE INVESTMENTS (WEIGHTING: 0 – 5%) ......................................................................... 50
GE 3.1 R&D IN LOW-CARBON TECHNOLOGIES (WEIGHTING: 0-2.5%) ............................................................50



GE 3.2 COMPANY LOW-CARBON PATENTING ACTIVITY (WEIGHTING: 0-2.5%) ............................................52

SOLD PRODUCT PERFORMANCE (WEIGHTING: 0 – 32%) ............................................................... 54
GE 4.1 PRODUCT/SERVICE-SPECIFIC INTERVENTIONS (WEIGHTING: 0-11,66%)..........................................54



GE 4.2 PRODUCT/SERVICE SPECIFIC PERFORMANCE (WEIGHTING: 0-11,66%) ...........................................59



GE 4.3 SHARE OF LOW-CARBON PRODUCTS/SERVICES (WEIGHTING: 0-11,66%) .......................................63

GE 4.4 SUB-CONTRACTED TRANSPORT SERVICE PERFORMANCE (WEIGHTING: 0-8,75%) ......................64

MANAGEMENT (WEIGHTING: 10%) ................................................................................................... 71
GE 5.1 OVERSIGHT OF CLIMATE CHANGE ISSUES (WEIGHTING: 3%) ............................................................71
Generic methodology | ACT Initiative | Version 1 | page 3GE 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY (WEIGHTING: 3%) .........................................................73



GE 5.3 LOW-CARBON TRANSITION PLAN (WEIGHTING: 2%) ............................................................................76



GE 5.4 CLIMATE CHANGE MANAGEMENT INCENTIVES (WEIGHTING: 1%) ....................................................80

GE 5.5 CLIMATE CHANGE SCENARIO TESTING (WEIGHTING: 1%) ..................................................................83

SUPPLIER ENGAGEMENT (WEIGHTING: 0 – 20%) ............................................................................ 85
GE 6.1 STRATEGY TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)85



GE 6.2 ACTIVITIES TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)
88

CLIENT ENGAGEMENT (WEIGHTING: 0-20%) ................................................................................... 90
GE 7.1 STRATEGY TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE THEIR GHG EMISSIONS(WEIGHTING: 0-10%)...........................................................................................................................................................90
GE 7.2 ACTIVITIES TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE THEIR GHG EMISSIONS(WEIGHTING: 0-10%)...........................................................................................................................................................92
POLICY ENGAGEMENT (WEIGHTING: 5%) ........................................................................................ 94
GE 8.1 COMPANY POLICY ON ENGAGEMENT WITH TRADE ASSOCIATIONS (WEIGHTING: 1%) ................94

GE 8.2 TRADE ASSOCIATIONS SUPPORTED DO NOT HAVE CLIMATE-NEGATIVE ACTIVITIES ORPOSITIONS (WEIGHTING: 2%) ...........................................................................................................................................96


GE 8.3 POSITION ON SIGNIFICANT CLIMATE POLICIES (WEIGHTING: 1%) ....................................................97



GE 8.4 COLLABORATION WITH LOCAL PUBLIC AUTHORITIES (WEIGHTING: 1%) .......................................98

BUSINESS MODEL (WEIGHTING: 10-15%) ...................................................................................... 100
GE 9.1 PROGRESS TOWARDS A FULLY DECARBONIZED BUSINESS (WEIGHTING: 3,3-7,5%) ................ 100

GE 9.2 INTEGRATION OF THE LOW-CARBON ECONOMY IN CURRENT AND FUTURE BUSINESS MODELS(WEIGHTING: 3.3-7,5%) ................................................................................................................................................... 103
6.

GE 9.3 SHARE OF LOW-CARBON CLIENTS (WEIGHTING: 0-5%).................................................................... 105

ASSESSMENT .......................................................................................................... 107
6.1. SECTOR BENCHMARK ............................................................................................................ 107
CONNECTION WITH OTHER ACT METHODOLOGIES ................................................................................. 107
GENERAL BENCHMARK APPROACH ............................................................................................................ 109
BENCHMARKING COMPANY DIRECT EMISSIONS TARGETS AND PERFORMANCE ............................ 112


BUILDINGS ............................................................................................................................................................... 113



TRANSPORT ............................................................................................................................................................ 118



INDUSTRY ENERGY CONSUMPTION ................................................................................................................... 120●

INDUSTRY DIRECT PROCESS .............................................................................................................................. 120



RENEWABLE ENERGY........................................................................................................................................... 121
BENCHMARKING COMPANY UPSTREAM INDIRECT EMISSIONS TARGETS AND PERFORMANCE ... 121
BENCHMARKING COMPANY DOWNSTREAM INDIRECT EMISSIONS TARGETS AND PERFORMANCE
122

6.2. ALLOCATION METHOD AND SPECIFIC CASES ...................................................................... 123
6.3. OTHER QUANTITATIVE BENCHMARKS USED FOR INDICATORS ......................................... 124
6.4. WEIGHTINGS ........................................................................................................................... 125


RATIONALE FOR WEIGHTINGS ............................................................................................................................ 130
Generic methodology | ACT Initiative | Version 1 | page 4

6.5. DATA REQUEST....................................................................................................................... 135

7.

RATING .................................................................................................................... 137
7.1. NARRATIVE SCORING ............................................................................................................ 137
7.2. TREND SCORING ..................................................................................................................... 138

8.

ALIGNED STATE ...................................................................................................... 138

9.

SOURCES ................................................................................................................. 140

10.

GLOSSARY............................................................................................................... 141

Generic methodology | ACT Initiative | Version 1 | page 5

1. Introduction
The 2015 United Nations Climate Change Conference (COP21) in Paris further strengthened the global
recognition of limiting climate change. Political agreement was reached on limiting warming to 2 degrees
above pre-industrial levels. The project ‘Assessing low-carbon Transition’ (ACT) measures a company'salignment with a future low-carbon world. The goal is to drive action by companies and encourage businesses
to move to a 2-degrees compatible pathway in terms of their climate strategy, business model, investments,
operations and GHG emissions management. The general approach of ACT is based on the Sectoral
Decarbonization Approach (SDA) developed by the Science-Based Targets initiative (SBTi) in order tocompare company’s alignment with a 2-degree world, the application of which is described in the ACT
Framework document [5] (Sectoral Decarbonization Approach (SDA): A method for setting corporate emission
reduction targets in line with climate science, 2015).
In order to make human activities compatible with limited global warming, companies and the whole economy
are required to take urgent actions. The objective of the ACT initiative is to determine the extent to which
companies are in line with a transition towards a low-carbon economy.
This ACT Generic methodology is unique in the context of the ACT initiative. Indeed, previously, the focus
has been brought on developing methodologies for specific sectors for the following reasons: certain sectors
have more actions to do and a more direct role to play in reducing emissions to close the emissions gap asthey operate in high emitting sectors. Thus, the sectoral approach enables us to make sure that relevant andappropriate actions are assessed according to the company’s activity. However, a large number of companies
also have a significant impact on emissions and do not necessarily operate within one of the high emitting
sectors covered by a specific ACT sector methodology. In order to cover all economic sectors, this ACT
Generic methodology has been developed for companies operating in economic sectors that are not coveredby a specific ACT sector methodology.

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2. Principles
The selection of principles to be used for the methodology development and implementation is explained in
the general ACT Framework [1]. Table 1 recaps the ACT principles that were adhered to when developing
the methodology.
TABLE 1: PRINCIPLES FOR IMPLEMENTATIONRELEVANCE - Select the most relevant information (core business and stakeholders) to assess lowcarbon transition.
VERIFIABILITY - The data required for the assessment shall be verified or verifiable.
CONSERVATIVENESS - Whenever the use of assumptions is required, the assumption shall err on theside of achieving a 2° maximum global warming.
CONSISTENCY - Whenever time series data is used, it should be comparable over time.
LONG-TERM ORIENTATION - Enables the evaluation of the long-term performance of a company
while simultaneously providing insights into short- and medium-term outcomes in alignment with the longterm.

3. Scope
3.1. SCOPE OF THE DOCUMENT
This document presents the ACT Generic methodology for the companies operating in sectors not coveredby other specific ACT methodologies. It includes rationales, definitions, indicators and guidance for
performance assessment.
The framework of performance indicators is similar for all the companies assessed by this ACT Genericmethodology but the weightings may differ to reflect the specific levers of each type of company dependingon their hotspots in terms of GHG emissions and main decarbonization levers.

3.2. SCOPE OF THE ACT GENERIC METHODOLOGYAs all the companies have their role to play in the low-carbon transition, the ACT initiative developed the ACT
Generic methodology so that companies not included in a specific sector or multi-activity companies canassess their climate strategy in relation to the requirements of a low-carbon economy. Therefore, the present
ACT Generic methodology refers to all sectors not covered by other ACT methodologies (existing or future).

Generic methodology | ACT Initiative | Version 1 | page 7

Existing ACT methodologies

To be developed ACT
methodologies

Auto
Building Construction
Real Estate
Property Development
RetailElectric Utilities
Oil & Gas
Transport
CementIron & SteelFood
Agriculture & Agrifood
Glass
Chemicals
Pulp & Paper
Aluminium

TABLE 2: EXISTING AND TO BE DEVELOPED ACT METHODOLOGIESThis ACT Generic methodology should be used to assess companies operating in a large and various rangeof activities all along the value chain such as the following categories [1]:-Extraction activities: Mining & Quarrying-

Industry: Specific methodologies have been developed for some industries [2]. Therefore, ACT
Generic methodology focuses on other types of industries such as manufacturing, wholesale andrepair of vehicles and infrastructure construction,-

Waste and water management: water transportation and utilities as well as solid waste management[3].

-

Services with high GHG impact [4]: Financial and insurance activities, accommodation and foodservice activities, information and communication, human health & social work activities, arts,
entertainment and recreation.

-

Services with low impact: Education, professional, scientific and technical activities, administrativeand support activities, public administration and defence, compulsory social security, activities ofhouseholds as employers, extraterritorial and other services.

The figure below suggests a mapping of the sectors covered by the ACT Generic methodology. The sectoral
breakdown presented below is based on the NACE taxonomy[6]. This decomposition has no impact on themethodology and is purely illustrative. A table of correspondence with CDP ACS is included in the appendix
in order to give a better understanding.
[1] It should be noted that this list is not intended to be exhaustive. Also, some sectors might be partly covered by existing or to
be developed ACT methodologies that have been excluded of the scope of ACT Generic.
[2] Please refer to “Table 2: Existing and to be developed ACT methodologies” to check the industries covered by specific ACT
methodologies.
[3] This taxonomy is based on “Sector codes - CDP” available in the appendix[4] Financial insurance and IT sectors are under discussion and specific ACT methodologies might be developed for these two
sectors.

Generic methodology | ACT Initiative | Version 1 | page 8

FIGURE 1: MAPPING OF THE SECTORS COVERED BY ACT GENERIC

4. Boundaries
The Boundaries section specifies which emission sources are included in this methodology. [1]➔ NOTA BENE


Hereafter, the term “emissions” will refer to all GHG emissions (not only CO2)
which shall be measured in CO2 equivalent.



ACT provides guidelines concerning the scope and boundaries of the sectors
covered by this methodology to determine which type of GHG emissions areincluded or excluded. However, it does not provide tools and databases tomeasure and compute these emissions. In particular, the choice of emission
factors does not fall under the responsibility of the ACT methodology. The
methodology will not require the use of specific emission factors but may
recommend emission factors that are aligned and consistent with the ones
used in the reference pathway or benchmark. However, emission factors
should be consistent with emission factors’ and GWP’s used to compute thereference pathways and benchmark scenarios for the quantitative indicatorsin order to be relevant.

Generic methodology | ACT Initiative | Version 1 | page 9

The scope of ACT Generic is very broad and heterogeneous. Based on the principle of relevance, ACT
methodologies focus on the main emissions sources throughout the value chain. Thus, depending on thecompany’s activity, the main emissions sources can be upstream, direct or downstream. That is the reason
why all emissions (direct and significant indirect) need to be considered in ACT Generic in order to cover the
impact of all the companies included in the previous section.

4.1. REPORTING BOUNDARIESFor most of the companies, a low-carbon transition will lead to a transformation of the company’s activities
and assets as well as the entire value chain, from upstream activities to downstream activities.
Sources of emissions analyzed
Initially, the objective of the ACT Generic methodology is to consider all the emissions sources due to theheterogeneity of activities. Therefore, both direct and significant indirect emissions are included in themethodology.
Direct emissions: In most of cases, the company has levers in order to act on reducing these emissions,especially through the following sources analyzed in ACT Generic:-

Building (energy consumption of the buildings used by the company)-

Transport (emissions of the company’s fleet)-

Industry energy consumption (energy consumptions of the plants operated by the company)-

Industrial process (emissions directly linked to the industrial process (e.g.: refrigerant leakage))-

Waste (emissions related to waste sector)

Emissions from agriculture / land use are excluded from the scope. These emissions are covered by ACTAgriculture methodology and concern very few companies operating in sectors covered by ACT Generic.
Significant indirect emissions are also to be taken into account:-

Upstream activities through emissions due to products / raw material and services purchased by thecompany-

Downstream activities through the emissions due to the sold products / services performance-

Emissions due to subcontracted transportation activities (upstream or downstream)

Emissions boundaries of ACT Generic

Mandatory
Direct emissions
Upstream indirect emissions: Purchased
goods and services, capital goods, upstream
transportation and distribution

ExcludedIndirect emissions: Business travel, employee
commuting, waste generated in operations,franchises, fuel and energy-related activities(not included in Direct emissions), upstream
leased assets, downstream leased assets.

Downstream indirect emissions: Processingof sold products, use of sold products, end-oflife treatment of sold products, downstream
transportation and distribution, business travels

Generic methodology | ACT Initiative | Version 1 | page 10

Companies are encouraged to report their optional GHG emissions, especially if they are considered as
significant by the analyst.
Figure 2 illustrates all the GHG emissions considered in ACT Generic:

FIGURE 2: GHG EMISSIONS CONSIDERED IN ACT GENERIC

Assessment adapted to the company emissions’ profile
Considering the magnitude of the total direct, upstream and downstream emissions for the entire value chain,
the analysis will necessarily have to focus on the most relevant aspects based on the company’s main sourcesof emissions. Thus, a focus will be brought regarding the company’s specific challenges. The assessment will
be adapted to each company depending on its activities and on its main sources of emissions. This method
enables the analyst to assess a company based on its own specificities and stakes.
In a nutshell, the ACT Generic methodology will not explicitly define boundaries but propose an assessment
methodology tailored to each company regarding its hotspots in order to capture the most significant
emissions sources (direct and significant indirect) or substantial emissions occurring all along the value chain,
and its main decarbonization levers. Accordingly, the weighting of modules and choice of indicators will be
adapted based on the company's profile. [5][5] Please, refer to the “Weightings section” for more information

Here are some examples to illustrate the assessment principle:

Generic methodology | ACT Initiative | Version 1 | page 11

FIGURE 3: EXAMPLE OF COMPANY A

The main challenge for thiscompany is the products andraw materials procurement.
Therefore, the assessment
will focus mainly on thesources of emissions related
to the upstream activities.

FIGURE 4: EXAMPLE OF COMPANY B

This

company

has morechallenges to face from its
purchased products to theuse of the products as well as
thetransportation.

analysiswillconsiderTheallsignificant indirect emissions
included in ACT Genericboundaries

FIGURE 5: EXAMPLE OF COMPANY C

This company has morechallenges to face from its
direct activities and its
emissions related to thewaste management. The
analysiswillconsiderrelevant direct emissions
included in ACT Genericboundaries.

The connection with other ACT methodologies is described in the Assessment chapter.

Generic methodology | ACT Initiative | Version 1 | page 12

4.2. RATIONALE
ACT boundaries refer to which aspects of the organizational scope are included in the analysis.
ACT aims to engage companies in a low-carbon transition and can be considered as a useful tool to structureand evaluate the company’s strategy. ACT Generic is therefore very flexible in order to be adapted to thecompany's challenge and reality.
Because of the heterogeneity of ACT Generic and the need to cover all the sectors described in the chapter“scope”, it has been proposed to include almost all GHG sources in the reporting boundaries:- Direct GHG emissions are relevant at every step of the value chain, and are under the control of
the companies,- Significant indirect GHG emissions are key in order to integrate efforts of companies to source lowcarbon solutions and products (upstream) as well as the use of the product (downstream).
By the principle of relevance, it is important to note that ACT Generic focuses on main material sources ofemissions. Indeed, ACT aims to select the most relevant information (core business and stakeholders) toassess low-carbon transition. Therefore, some sources of emissions have been excluded from the boundaries
of ACT Generic.

RATIONALE FOR EMISSIONS BOUNDARIES OF ACT GENERIC
ACT initiative aims to target materiality and assess if the company uses its levers to transition to a low-carbon
economy. Due to the sectoral heterogeneity presented in ACT Generic, materiality can differ from a company
to another. However, in order to address the relevant challenges for most of the companies, some emissions
have been pre-selected in order to focus on the relevant sources of emissions. Other emissions are
considered as excluded from the boundaries of the ACT Generic methodology.

5. Constructionof the data
infrastructure
5.1. DATA SOURCES
In order to carry out a company level assessment, many data points need to be gathered which can besourced from various locations. Principally, ACT relies on the voluntary provision of data by the participatingcompanies. The data provided by the companies may be of different types. Alongside this, however, external
data sources are consulted where this would streamline the process, ensure fairness, and provide additional
value for verification and validation.

Generic methodology | ACT Initiative | Version 1 | page 13

The ACT assessment uses the following data sources:

TABLE 2: ACT ASSESSMENT DATA SOURCESDATA SOURCE

MAIN USE

Company data from survey

Data source for calculating indicators.

Company data from models and simulations

Data source for calculating indicators.

Company data from life cycle assessment

Data source for calculating indicators.

Company data from econometric data

Data source for calculating indicators.

Contextual

information

Contextual and financial information on company anddatabase sources (E.g. Online and press

events related to the company that could impact the ACT

news, RepRisk)

assessment

andfinancial

Where indicators use third-party data sources as the default option, reporting companies may provide theirown data if they can provide a justification for doing so, and information about its verification status, any
assumptions used and the calculation methodology.

5.2. COMPANY DATA REQUEST
The data request will be presented to companies in a comprehensive data collection format. The following
data will be requested:

Data requested to the company
GHG emissions (direct, upstream indirect and downstream indirect)
Activity data
Reduction targets (absolute and intensity)
Low-Carbon CAPEX
R&D in low-carbon technologies
Low-carbon Patenting Activity
Environmental policy and details regarding governanceManagement incentives

Scenario testing

Generic methodology | ACT Initiative | Version 1 | page 14

List of environmental/CSR contract clauses in purchasing & suppliers’ selection process
List of initiatives implemented to influence suppliers to reduce their GHG emissions, green purchase policy ortrack record, supplier code of conduct
Client policy
List of initiatives implemented to influence client behaviour to reduce their GHG emissions
Company policy on engagement with trade associations
Position of the company on significant climate policies (public statements, etc.)
List and turnover or invested capital (or other financial KPI) of activities in new businesses related to lowcarbon business models
Current position and action plan of the company towards the identified low-carbon business models

5.3. PERFORMANCE INDICATORS
MA T UR ITY MA TR IX :Some modules are scored using a maturity matrix, as the assessment is qualitative. The maturity matrix
contains five levels of evaluation that are associated to scores given to the company for each indicator. For
some indicators, all 5 levels of the matrix are used to score the company, while for other indicators only somelevels are used, in a simpler and less granular approach (ex: level 1, 3 and 5 only). Some of the indicators
might be divided into sub-dimension that are evaluated individually before the score is aggregated to obtain
the indicator score.
Evaluation
level

Basic

Standard

Advanced

Next practiceLow-carbon
transitionaligned

Score

0

0,25

0,5

0,75

1

Generic methodology | ACT Initiative | Version 1 | page 15

MO D U LES A ND I ND IC A T OR S:

Erreur ! Source du renvoi introuvable. illustrates the performance indicators used by the ACT Generic methodology.
Past

Present
GE 1.5 Achievement of previous and current targets

1.Targets
GE 2.1 Trend in past emissions intensity
2. Material Investment
3. Intangible investment
Corebusiness
performance 4. Sold product performance

5. Management
6. Supplier
7. Client
Influence
8. Policy engagement

9. Business model

FutureGE 1.1 Alignment of direct emissions reduction targets
GE 1.2 Alignment of upstream emissions reduction targets
GE 1.3 Alignment of downstream emissions reduction targets
GE 1.4 Time horizon of targets
GE 2.2 Trend in future Scope 1+2 emissions intensity
GE 2.3 Share of low carbon CAPEX
GE 2.4 Locked-in emissions

GE 3.1 R&D in Low carbon and mitigation technologies
GE 3.2 Company low carbon patenting activity
GE 4.1 Product specific intervention
GE 4.2 Product specific performance
GE 4.3 Share of low-carbon products/services
GE 4.4 Sub-contracted transport service performance
GE 5.1 Oversight of climate change issues
GE 5.2 Climate change oversight capability
GE 5.4 Climate change management incentives
GE 6.2 Activities to influence suppliers to reduce their GHG emissions
GE 7.2 Activities to influence consumer behaviour to reduce their GHG emissions

GE 5.3 Low carbon transition plan
GE 5.5 Climate change scenario testing
GE 6.1 Strategy to influence suppliers to reduce their GHG emissions
GE 7.1 Strategy to influence customer behaviour to reduce their GHG
emissions

GE 8.1 Company policy on engagement with trade associations
GE 8.2 Trade associations supported do not have climate-negative activities or positions
GE 8.3 Position on significant climate policies
GE 8.4 Collaboration with local public authorities
GE 9.1 Progress towards a fully decarbonized business
GE 9.2 Integration of the low carbon economy in the current and future business models
GE 9.3 Share of low carbon clientsTARGETS (WEIGHTING: 15%)


GE 1.1 ALIGNMENT OF DIRECT EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%)

DESCRIPTION &REQUIRE MENTS

GE 1.1 ALIGNME NT OF DIRECT E MIS SIONS RED UCTION T ARGETS (WEIGHT ING: 0-12%)

SH OR T D ESC R IPT IO N

A measure of the alignment of the company’s direct emissions reduction targets with their low-carbon benchmark pathway. The indicator will

OF IN D IC A T OR

identify the gap between the company’s targets and the low-carbon benchmark pathway, which is expressed as the company’s commitment
gap.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Targets information for each relevant direct GHG emissions sources (Target year, emission reduction between reporting year andtarget year, coverage)♦

Share of direct emission sources in total direct emissions [%]♦(Optional) – Base year, emissions at base year

The benchmark indicators involved are the following :Target type
Building

Parameter
EIbb

Intensity metrickgCO2/m²

Methodological sources
ACT Real Estate[9] / SDA service
building [17]Transport

EIbt

kgCO2/p.km

ACT Auto / ACT Transport [11]kgCO2/t.km

Generic methodology | ACT Initiative | Version 1 | page 17

Industry energy

EIben% of absolute emissions

SBT absolute contraction [15]EIrl

[gCO2e refrigerant leaked]/[kgRGR EU15 scenario for 2030 [7] - Zero

refrigerant in cold equipment]leakage tolerance in 2050Form.

EIip% of absolute emissions

SBT absolute contraction[15]Waste Management

Elw% of absolute emissions

SBT absolute contraction [15]

Renewable energy share

EIre

Share of renewable energy1

SDA power generation [16]consumption
Industry direct process –Refrigerant leakage
Industry direct process –Other industrial process

in electricity

These benchmarks correspond to the main sources of direct emissions a corporate organization usually generates. They will be applied dependingon the type of direct emissions identified by the analyst.
Also, the choice of the benchmark depends on the scenario availability. The selection will be made according to the following process:-If a specific pathway based on carbon intensity from an ETP scenario is available, a target in carbon intensity will be asked and analysed,-

If such a pathway does not exist to date, a default pathway in contraction is applied.

Also, if needed and justified, the analyst can propose a reference pathway meeting ACT requirement (data sourcing, assumptions robustness …).
Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with theambition of the Beyond-2-Degree Scenario2 (B2DS). If the analyst/company has the choice between two benchmarks, the most ambition scenario
should be used, and must meet at minimum the ambition requirements of the B2DS.

1 The original metric has been reworked for ACT Retail and has been taken from this methodology.
2 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

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H OW T HE A NA LY SIS

The analysis is based on a trend ratio between the company’s direct emissions target and the company benchmark. Trend are computed

WILL B E D O NE

between reporting year and the longest time horizon of the target.
The company’s target pathway is the decarbonisation over time, defined by the company’s direct emissions reduction target. To compute it,a straight line is drawn between the starting point of the analysis and the company’s target endpoint.
The company benchmark pathway is the company specific direct emissions low-carbon benchmark pathway.
The company achieves the maximum score if the company’s target pathway and the company benchmark pathway are aligned and also if
the targets are covering most of the company’s direct emissions at reporting year.
C A LC U LA TI O N OF SC ORE:-

Trend ratio

The score is calculated by dividing the company engagement of reduction by the specific benchmark emission intensity reduction between
the reporting year and the target year through the trend ratio:
𝑇𝑟𝑒𝑛𝑑 𝑟𝑎𝑡𝑖𝑜 =𝐶𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑔𝑎𝑔𝑚𝑒𝑛𝑡 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐶 (𝑌𝑇 ) − 𝐸𝐼𝐶 (𝑌𝑅 )=𝐵𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘 𝑝𝑎𝑡ℎ𝑤𝑎𝑦 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐵 (𝑌𝑇 ) − 𝐸𝐼𝐵 (𝑌𝑅 )where EIc(Yt) is the company direct emissions intensity at target year, EIc (Yr) is the company direct emissions intensity at reporting year,
EIb(Yt) is the benchmark direct emission intensity at target year and EIb(Yr) is the benchmark direct emission intensity at reporting year.
The target intermediate score (Ts) is equal to 0 if the trend ratio is less than 0. It means company’s commitment is equal or less tobusiness as usual.
The target intermediate score receives 1 if the trend ratio is superior to 1. It means company’s commitment is equal or more than thecompany’s benchmark ambition.
Otherwise, the target intermediate score (Ts) is equal to the trend ratio, It means company’s commitment is between business as usual
and company’s benchmark ambition.

Generic methodology | ACT Initiative | Version 1 | page 19-Final Score

The final score assigned to the indicator is calculated as follows:
If the target coverage of total company emissions at reporting year (Cyr) represents more than 95%, the final score is equal to:
Score = Trend ratio x Target coverage of total company emissions (CYr))
Otherwise final score of the indicator is equal to:
Score = 1 – Trend ratio
If the company has set several targets, the consolidation of the scores assigned to each target will be based on the share of emissions
covered by the targets.
-

Targets that do not cover > 95%3 of generation emissions are not preferred in the calculations. If only such targets are available,
then the score will be adjusted downwards in proportion with % coverage.

Generic methodology | ACT Initiative | Version 1 | page 20

RATIONALE

GE 1.1 ALIGNME NT OF FUT URE TARGETS WITH LOW-CARBON SCENARIOR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Targets are included in the ACT assessment for the following reasons:

Targets are an indicator of corporate commitment to reduce emissions and are a meaningful metric of the company’s internal planningtowards low-carbon transition.



Targets are one of the few metrics that can predict a company’s long-term plan beyond that which can be projected in the short-term,
satisfying ACT’s need for indicators that can provide information on the long-term future of a company.



For some sectors covered by ACT Generic, direct emissions might represent a high source of emissions. A GHG emissions reduction
target should be assigned to them.

SC OR I N G R A TI ONA LE:

Targets for each sub-sector are quantitatively interpreted and directly compared to a low-carbon benchmark build from the company’s current
level of emissions at reporting year and converging toward the 2050 value of the sectoral benchmark relevant for this source.
Relevant direct emissions sources of the company shall be identified by the analyst, with corresponding low-carbon scenario among thoseavailable in ACT sectoral methodologies. Specific information on company emissions sources might be needed to choose the most relevant
low-carbon scenario (e.g. geography, type…).
The measurement of the commitment gap was chosen for its relative simplicity in interpretation and powerful message.
NB: In previous ACT methodologies, the commitment gap calculation was based on the difference between the company’s target and the company
benchmark 5 years after the reporting year. The analysis is now based on the difference between the company’s target and the company benchmark
at the target year. The previous version assumed that the emission reduction would be linear between reporting year and reporting year + 5, which
could affect the result as the low-carbon pathway is not linear, the new version avoid this assumption by using directly data at target year.

3

This threshold is in line with other ACT methodologies, such as the Auto manufacturing methodology.

Generic methodology | ACT Initiative | Version 1 | page 21

GE 1.2 ALIGNMENT OF UPSTREAM EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%)

DESCRIPTION &REQUIRE MENTS

GE 1.2 ALIGNME NT OF UPSTREAM E MIS SIONS REDUCTION TARGETS (WEIGHTING: 0- 12% )SH OR T D ESC R IPT IO N

A measure of the alignment of the company’s upstream emissions reduction targets with their low-carbon benchmark pathway. The indicator

OF IN D IC A T OR

will identify the gap between the company’s targets and the low-carbon benchmark pathway, which is expressed as the company’scommitment gap.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Targets information for each relevant upstream GHG emissions sources (Target year, emission reduction between reporting year andtarget year, coverage)♦

Share of upstream emission sources in total upstream emissions [%]♦(Optional) – Base year, emissions at base year

Upstream indirect emissions cover purchased goods and services, capital goods, upstream transportation and distribution.
The benchmark indicators involved are:
Target type

Parameter

Intensity metric

Methodological sources

Cement emissions intensity

𝐶𝐵𝑃𝑃2

kgCO2/ton of cement

ACT Cement [12]Oil & Gas products emissions

𝐶𝐵𝑃𝑃3

tCO2/TJACT Oil & Gas [13]intensity
productsemissions

𝐶𝐵𝑃𝑃4

TBD

ACT Glass&products

𝐶𝐵𝑃𝑃5

TBD

ACT Pulp & Paper

Iron & Steel emissions intensity

𝐶𝐵𝑃𝑃6

TBD

ACT Iron & SteelGlassintensity
Pulp

Paper

emissions intensity

Generic methodology | ACT Initiative | Version 1 | page 22

emissions

𝐶𝐵𝑃𝑃7

TBD

ACT Food

Aluminium emissions intensity

𝐶𝐵𝑃𝑃8

TBD

ACT Aluminium% of absolute emissions

SBT absolute contraction [15]Foodproducts

intensity

Upstream indirect emissions

EIbabs

NB: When finished, all upcoming sectors covered by a specific ACT methodology will be integrated in ACT Generic methodology
The choice of the benchmark depends on the scenario availability. The selection will be made according to the following process:If a specific pathway based on carbon intensity from a ETP scenario is available for products and materials purchased, and if the emissions related tothese purchases represent a high source of emissions for the company upstream scope, a target in carbon intensity will be asked and analysed, (E.g.:
purchase/use of cement, steel.)
Otherwise, a default pathway in absolute contraction is applied.
Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with theambition of the Beyond-2-Degree Scenario4 (B2DS). If the analyst/company has the choice between two benchmarks, the most ambition scenario
should be used, and must meet at minimum the ambition requirements of the B2DS.

4 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

Generic methodology | ACT Initiative | Version 1 | page 23

H OW T HE A NA LY SIS

The analysis is based on a trend ratio between the company’s upstream emissions target and the company benchmark. Trend are computed

WILL B E D O NE

between reporting year and the longest time horizon of the target.
The company’s target pathway is the decarbonization over time, defined by the company’s upstream emissions reduction target. To computeit, a straight line is drawn between the starting point of the analysis and the company’s target endpoint.
The company benchmark pathway is the company specific upstream emissions low-carbon benchmark pathway.
The company achieves the maximum score if the company’s target pathway and the company benchmark pathway are aligned and also if
the targets are covering most of the company’s upstream emissions at reporting year.
C A LC U LA TI O N OF SC ORE:-

Trend ratio

The score is calculated by dividing the company engagement of reduction by the specific benchmark emission intensity reduction between
the reporting year and the target year through the trend ratio:
𝑇𝑟𝑒𝑛𝑑 𝑟𝑎𝑡𝑖𝑜 =𝐶𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑔𝑎𝑔𝑚𝑒𝑛𝑡 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐶 (𝑌𝑇 ) − 𝐸𝐼𝐶 (𝑌𝑅 )=𝐵𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘 𝑝𝑎𝑡ℎ𝑤𝑎𝑦 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐵 (𝑌𝑇 ) − 𝐸𝐼𝐵 (𝑌𝑅 )where EIc(Yt) is the company upstream emissions intensity at target year, EIc (Yr) is the company upstream emissions intensity at reporting
year, EIb(Yt) is the benchmark upstream emission intensity at target year and EIb(Yr) is the benchmark upstream emission intensity atreporting year.
The target intermediate score (Ts) is equal to 0 if the trend ratio is less than 0. It means company’s commitment is equal or less to businessas usual.
The target intermediate score receives 1 if the trend ratio is superior to 1. It means company’s commitment is equal or more than thecompany’s benchmark ambition.
Otherwise, the target intermediate score (Ts) is equal to the trend ratio, It means company’s commitment is between business as usual andcompany’s benchmark ambition.
-

Final Score

The final score assigned to the indicator is calculated as follows:

Generic methodology | ACT Initiative | Version 1 | page 24

If the target coverage of total company emissions at reporting year (Cyr) represents more than 95%, the final score is equal to:
Score = Trend ratio x Target coverage of total company emissions (CYr))
Otherwise final score of the indicator is equal to:
Score = 1 – Trend ratio
If the company has set several targets, the consolidation of the scores assigned to each target will be based on the share of emissions
covered by the targets.
-

Targets that do not cover > 95%5 of generation emissions are not preferred in the calculations. If only such targets are available,
then the score will be adjusted downwards in proportion with % coverage.

RATIONALE

GE 1.2 ALIGNME NT OF UPSTREAM E MIS SIONS R EDUCTION TARGETS

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Upstream reduction targets are included in the ACT Generic assessment for the following reasons:

Targets are an indicator of corporate commitment to reduce emissions, and are a meaningful metric of the company’s internal planningtowards the transition.



Targets are one of the few metrics that can predict a company’s long-term plans beyond that which can be projected in the short-term,
satisfying ACT’s need for indicators that can provide information on the long-term future of a company.



For some sectors covered by ACT Generic, upstream emissions might represent a high source of emissions. A GHG emissions reduction
target should be assigned to them.

5This threshold is in line with other ACT methodologies, such as the Auto manufacturing methodology.

Generic methodology | ACT Initiative | Version 1 | page 25

SC OR I N G R A TI ONA LE:

Targets for each sub-sector are quantitatively interpreted and directly compared to a low-carbon benchmark build from the company’s current
level of emissions at reporting year and converging toward the 2050 value of the sectoral benchmark relevant for this source.
Relevant upstream emissions sources of the company shall be identified by the analyst, with corresponding low-carbon scenario among
those available in ACT sectoral methodologies. Specific information on company emissions sources might be needed to choose the most
relevant low-carbon scenario (e.g. geography, type…).
The measurement of the commitment gap was chosen for its relative simplicity in interpretation and powerful message.
.

Generic methodology | ACT Initiative | Version 1 | page 26

GE 1.3 ALIGNMENT OF DOWNSTREAM EMISSIONS REDUCTION TARGETS (WEIGHTING: 0-12%)

DESCRIPTION &REQUIRE MENTS

GE 1.3 ALIGNME NT OF DOWNSTREA M EMISSIONS REDUC TION TARGET SSH OR T D ESC R IPT IO N

A measure of the alignment of the company’s upstream emissions reduction targets with their low-carbon benchmark pathway. The indicator

OF IN D IC A T OR

will identify the gap between the company’s targets and the low-carbon benchmark pathway, which is expressed as the company’scommitment gap.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Targets information for each downstream GHG emissions sources (Target year, emission reduction between reporting year and target
year, coverage)♦

Share of downstream emission sources in total downstream emissions [%]♦(Optional) – Base year, emissions at base year

Downstream indirect emissions cover processing of sold products or services, use of sold products or services, end-of-life treatment of soldproducts or sevices, downstream transportation and distribution.
The benchmark indicators involved are:
Target typeTransport

Parameter
𝐸𝐼𝑏𝑡

vehiclesemissions intensity
𝐶𝐵𝑆𝑃2

Produced electricity carbon

Intensity metrickgCO2e/ton.km

Methodological sources
or

ACT Transport [11] / ACTkgCO2e/passenger.km

Auto

gCO2/kWhACT Electric Utilities [14]% of absolute emissions

SBT absolute contraction

intensity
Downstream
emissionsindirect

EIbabs[15]

NB: When finished, all upcoming sectors covered by a specific ACT methodology will be integrated in ACT Generic methodology

Generic methodology | ACT Initiative | Version 1 | page 27

The choice of the benchmark depends on the scenario availability. The selection will be made according to the following process:- A benchmark in carbon intensity is applied If the company meets the following requirements:-

The use of sold products or services represents a high source of downstream emissions,-

The company produces ready-to-use products or services and is able to measure their carbon intensity,-

A specific pathway based on carbon intensity from an ETP scenario is available.
Eg: ACT transport for transport vehicles manufacturers.

Otherwise, a default pathway in absolute contraction is applied.
Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with theambition of the Beyond-2-Degree Scenario6 (B2DS). If the analyst/company has the choice between two benchmarks, the most ambition scenario
should be used, and must meet at minimum the ambition requirements of the B2DS.
H OW T HE A NA LY SIS

The analysis is based on a trend ratio between the company’s downstream emissions targets and the company benchmark. Trend are

WILL B E D O NE

computed between reporting year and the longest time horizon of the target.
The company’s target pathway is the decarbonization over time, defined by the company’s upstream emissions reduction target. To computeit, a straight line is drawn between the starting point of the analysis and the company’s target endpoint.
The company benchmark pathway is the company specific upstream emissions low-carbon benchmark pathway.
The company achieves the maximum score if the company’s target pathway and the company benchmark pathway are aligned and also if
the targets are covering most of the company’s downstream emissions at reporting year.
C A LC U LA TI O N OF SC ORE :

Trend ratio

The score is calculated by dividing the company engagement of reduction by the specific benchmark emission intensity reduction between
the reporting year and the target year through the trend ratio:
𝑇𝑟𝑒𝑛𝑑 𝑟𝑎𝑡𝑖𝑜 =𝐶𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑔𝑎𝑔𝑚𝑒𝑛𝑡 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐶 (𝑌𝑇 ) − 𝐸𝐼𝐶 (𝑌𝑅 )=𝐵𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘 𝑝𝑎𝑡ℎ𝑤𝑎𝑦 𝑡𝑟𝑒𝑛𝑑
𝐸𝐼𝐵 (𝑌𝑇 ) − 𝐸𝐼𝐵 (𝑌𝑅 )6 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

Generic methodology | ACT Initiative | Version 1 | page 28

where EIc(Yt) is the company downstream emissions intensity at target year, EIc (Yr) is the company downstream emissions intensity atreporting year, EIb(Yt) is the benchmark downstream emission intensity at target year and EIb(Yr) is the benchmark downstream emission
intensity at reporting year.
The target intermediate score (Ts) is equal to 0 if the trend ratio is less than 0. It means company’s commitment is equal or less tobusiness as usual.
The target intermediate score receives 1 if the trend ratio is superior to 1. It means company’s commitment is equal or more than thecompany’s benchmark ambition.
Otherwise, the target intermediate score (Ts) is equal to the trend ratio, It means company’s commitment is between business as usual
and company’s benchmark ambition.
Final Score

The final score assigned to the indicator is calculated as follows:
If the target coverage of total company emissions at reporting year (Cyr) represents more than 95%, the final score is equal to:
Score = Trend ratio x Target coverage of total company emissions (CYr))
Otherwise final score of the indicator is equal to:
Score = 1 – Trend ratio
If the company has set several targets, the consolidation of the scores assigned to each target will be based on the share of emissions
covered by the targets.
Targets that do not cover > 95%7 of generation emissions are not preferred in the calculations. If only such targets are available, then thescore will be adjusted downwards in proportion with % coverage.

7

This threshold is in line with other ACT methodologies, such as the Auto manufacturing methodology.

Generic methodology | ACT Initiative | Version 1 | page 29

RATIONALE

GE 1.3 ALIGNME NT OF DOWNSTR EA M EMISSIONS REDUC TION TARGET S

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Downstream emissions reduction targets are included in the ACT Generic assessment for the following reasons:

Targets are an indicator of corporate commitment to reduce emissions, and are a meaningful metric of the company’s internal planningtowards the transition.



Targets are one of the few metrics that can predict a company’s long-term plans beyond that which can be projected in the short-term,
satisfying ACT’s need for indicators that can provide information on the long-term future of a company.



For some sectors covered by ACT Generic, downstream emissions might represent a high source of emissions. A GHG emissions
reduction target should be assigned to them.

SC OR I N G R A TI ONA LE:

Targets for each sub-sector are quantitatively interpreted and directly compared to a low-carbon benchmark build from the company’s current
level of emissions at reporting year and converging toward the 2050 value of the sectoral benchmark relevant for this source.
Relevant downstream emissions sources of the company shall be identified by the analyst, with corresponding low-carbon scenario among
those available in ACT sectoral methodologies. Specific information on company emissions sources might be needed to choose the most
relevant low-carbon scenario (e.g. geography, type…).
The measurement of the commitment gap was chosen for its relative simplicity in interpretation and powerful message.



GE 1.4 TIME HORIZON OF TARGETS (WEIGHTING: 2%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 1.4 T IME HORIZ ON OF TARGETS

A measure of the time horizons of company targets. The ideal set of targets is forward looking enough to include a long-time horizon that
includes the majority of a company’s asset lifetimes, but also includes short-term targets that incentivize action in the present.

Generic methodology | ACT Initiative | Version 1 | page 30

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Target year information for each relevant emissions sources (Year for each reported , target id)

H OW T HE A NA LY SIS

The analysis has two dimensions:

WILL B E D O NE♦

A comparison of: (a) the longest time horizon of the company’s targets, and (b) the long-term point fixed by ACT assessment
methodology.

♦

The company has interval targets that ensure both short and long-term targets are in place to incentivize short-term action andcommunicate long-term commitments.

A G GR E GA TE SC ORE: DIM E NS IO N 1: 50 %, DI ME N SIO N 2: 5 0%
DIMENSION 1 - TARGET ENDPOINT:

The company’s target endpoint (Te) is compared to the long-term point (LT), which is fixed at 2050 minus

the reporting year, aligned with low-carbon scenario. The company is allowed to present another LT point (closer to the present) but it must
be duly justified (eg: based on the average lifetime of emitting assets, sold products or services, purchased contracts, etc).
𝐿𝑇 = 2050 − 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟
The company’s target endpoint (Te) is equal to the longest time horizon among the company’s targets, minus the reporting year:
𝑇𝑒 = 𝐿𝑜𝑛𝑔𝑒𝑠𝑡 𝑡𝑎𝑟𝑔𝑒𝑡 𝑡𝑖𝑚𝑒 ℎ𝑜𝑟𝑖𝑧𝑜𝑛 − 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟
The analysis compares Te to LT. This analysis measures the horizon gap:
𝐻𝑜𝑟𝑖𝑧𝑜𝑛 𝑔𝑎𝑝 = 𝐿𝑇 − 𝑇𝑒

Generic methodology | ACT Initiative | Version 1 | page 31

The company’s target endpoint is scored according to the following scoring table:
HORIZON GAP

SCORE𝑻𝒆 > 𝐿𝑇50%

𝟑𝟑% ∗ 𝑳𝑻 < 𝑻𝒆 <Lt

75%* LTe -25%

𝑻𝒆 ≤ 𝟑𝟑% ∗ 𝑳𝑻

0%

T

DIMENSION 2 - INTERMEDIATE HORIZONS: All company targets and their endpoints are calculated and plotted. The ideal scoring company does

not have intervals between target endpoints larger than 5 years from the reporting year.
Measurements are done in five-year intervals between the reporting year and LT.
The company’s targets are compared according the following scoring table:
Intermediate target gap length

Score

All the gaps during Te are equal or less than 5 years

50%

All the gaps until 80% of Te are equal or less than 5 years

40%

All the gaps until 60% of Te are equal or less than 5 years

30%

All the gaps until 40% of Te are equal or less than 5 years

20%

All the gaps until 20% of Te are equal or less than 5 years

10%

All the gaps of 5 years or less do not reach 20% of Te or there
is no such gaps disclosed by the company

0%

An example is illustrated in Figure 1.

Generic methodology | ACT Initiative | Version 1 | page 32

FIGURE 1 : EXAMPLES OF HORIZONS OF INTERMEDIATE TARGETS SET BY THE COMPANY AND CORRESPONDING SCORES ON DIMENSION 2 OF THE INDICATOR 1.4

FOR A LL C ALC ULA TIO N S :♦♦If the company reports ‘year of target establishment’ in the data request, then the calculations may be redone using this as the baseline
instead of the reporting year. The company can attain up to 80% of the maximum score with this alternate calculation. The baselinethat results in the higher score will be used for the final score.
Targets that do not cover > 95% 8 of generation emissions are not preferred in the calculations. If only such targets are available, thenthe score will be adjusted downwards in proportion with % coverage.

RATIONALE

GE 1.4 T IME HORIZ ON OF TARGETS

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

The time horizon of targets is included in the ACT Generic assessment for the following reasons:♦8

The target endpoint is an indicator of how forward looking the company’s transition strategy is.

This threshold is in line with other ACT methodologies, such as the Auto manufacturing methodology.

Generic methodology | ACT Initiative | Version 1 | page 33

♦Aside from communicating long-term commitments, short-term action needs to be incentivized. This is why short time intervals
between targets are needed

GE 1.5 ACHIEVEMENT OF PAST AND CURRENT TARGETS (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 1. 5 ACHIEVE ME NT OF PAST AND CURRENT TARGET S

A measure of the company’s historic target achievements and current progress towards active emission reduction targets. All the scopes of

OF IN D IC A T OR

the company are considered. The ambition of the target is qualitatively assessed and is not included in the performance indicators.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

H OW T HE A NA LY SIS♦

Base year♦

Start year♦

Target year♦

Percentage of reduction target from base year in absolute emissions♦

Percentage of reduction target achieved in absolute emissions♦

Percentage of reduction target from base year in emissions intensity♦

Percentage of reduction target achieved in absolute emissions intensity♦

Percentage of direct emissions covered by the targets

For the performance score, this indicator is assessed on two dimensions, whereby companies achieve the maximum score if:

WILL B E D O NE
D IME NSI O N 1 : The company has achieved all previous emissions reduction targets with a target year in the past 10 years. If all pasttargets are achieved, the highest score is obtained. If not, the achievement ratio 𝑎 is computed as follows:

Generic methodology | ACT Initiative | Version 1 | page 34

𝑎=𝐸(𝑡𝑟𝑒𝑓 ) − 𝐸(𝑡ℎ𝑜𝑟𝑖𝑧𝑜𝑛 )𝐴=𝐸(𝑡𝑟𝑒𝑓 ) − 𝑇(𝑡ℎ𝑜𝑟𝑖𝑧𝑜𝑛 )𝐵

Where:
𝐸(𝑡𝑟𝑒𝑓 ) is the level of emissions of the company in the year the target was set.

𝑇(𝑡ℎ𝑜𝑟𝑖𝑧𝑜𝑛 ) is the target the company set (a given level of emissions at a given horizon year, now past).

𝐸(𝑡ℎ𝑜𝑟𝑖𝑧𝑜𝑛 ) is the effective level of emissions reached by the company in the target horizon year.

Achievement ratio

Score

𝑎≥1

100%

0.5 < 𝑎< 1

100%*(2*𝑎-1)

𝑎 ≤ 0.5

0%

If the company has several historic targets over the last 10 years, the ratio 𝑎 shall be computed for each target, and the average of all scoreshall be used for scoring.
D IME NSI O N 2: The company is currently on track to meet an existing emissions reduction target, whereby the ratio between the remaining

time period and the level remaining to target achievement (Progress Ratio p) is not lower than 0.5:

Generic methodology | ACT Initiative | Version 1 | page 35

𝑝=

1 − % 𝑡𝑖𝑚𝑒
≥ 0.5
1 − % 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒

The highest score is attained if p is 1 or higher. A percentage score is assigned for any value between 0.5 and 1.

Progress ratio

Score

p≥1

75%

0.5 < p < 175%*(2*p-1)

p ≤ 0.5

0%

Score
75%

0%

0.5

1

p

A G GR E GA TE SC ORE - D IM EN SI O N 1: 25 %, DI ME NSI O N 2: 7 5%

FOR A LL C ALC ULA TIO N S :Companies which do not have targets with target years in the past but only with target years in the future are not assessed on dimension
1, but only on dimension 2.

Targets that do not cover >95% of the company’s GHG emissions scope are not preferred in the calculation of dimension 2, but are notpenalized, as other indicators already penalize for not having a large coverage in the target.



If the company has multiple targets in different scopes that can be assessed according to the above criteria, then the score is an averagescore based on the progress ratios of all targets assessed.

The performance score does not assess the ambition level of previous targets, and therefore dimension 1 has only a low weight in the final
performance score. This information is also qualitatively assessed in the narrative analysis, which will take another look at the following
dimensions:RATIONALE



Achievement level: To what degree has the company achieved its previously set emissions reduction targets?

Progress level: To what degree is the company on track to meet its currently active emissions reduction targets?

Ambition level: What level of ambition do the previously achieved emissions reduction targets represent?

GE 1. 5 ACHIEVE ME NT OF PAST AND CURRENT TARGET SGeneric methodology | ACT Initiative | Version 1 | page 36

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

The historic target ambition and company performance is included in the ACT Generic for the following reasons:♦

The ACT assessment looks only to the past to the extent where it can inform on the future. This indicator is future-relevant by providing
information on the organizational capability to set and meet emission reduction targets. Dimension 1 of this indicator adds credibility
to any company claim to commit to a science-based reduction pathway.

♦

Dimension 2 of this indicator adds value to the assessment of comparison to the company’s performance with respect to their targets
in the reporting year.

SC OR I N G R A TI ONA LE:

Previous target achievement is not straightforward to interpret quantitatively. Therefore, the performance score makes no judgement of pasttarget ambition and leaves it to the assessment narrative for a meaningful judgement on the ambition level of past targets. Thus, Dimension
1 of the performance score will penalize companies who have not met past targets in the past 10 years, as this means the company has
lower credibility when setting ambitious science-based targets

Generic methodology | ACT Initiative | Version 1 | page 37

MATERIAL INVESTMENTS (WEIGHTING: 0 - 35%)


GE 2.1 TREND IN PAST EMISSIONS INTENSITY FROM MATERIAL INVESTMENT (WEIGHTING: 0-8,75%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 2.1 TREND IN PAST EMISS IONS INTE NSITY FROM MATERIAL INVES TME NT

This metric assesses the alignment of the company’s recent direct emission intensity trend for emissions within the boundaries with the trendof its decarbonization pathway. The recent emission intensity trend is computed over a 5-year period to the reporting year (reporting year
minus 5 years).

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦Carbon intensity at reporting year and Y-5 and other information if necessary (geography, …) regarding material investment
OR♦

Total direct emissions at reporting year and Y-5.
The benchmark indicators involved are:
Target type
Building

Parameter
EIbb

Intensity metrickgCO2/m2

Methodological sources
ACT Real Estate [9] /SDA service building [17]Transport

Industry energy

EIbt

EIbie

kgCO2/p.km

ACT Auto / ACT Transport

kgCO2/t.km[11]% of absolute emissions

SBT absolute contraction

consumption
Industry direct process –Refrigerant leakage

[15]
EIbrl

[gCO2e refrigerant

RGR EU15 scenario forleaked]/[kg refrigerant in

2030 [7] - Zero leakage

cold equipment]

tolerance in 2050.

Generic methodology | ACT Initiative | Version 1 | page 38

Industry direct process –EIbip% of absolute emissions

Other industrial process
Waste Management

SBT absolute contraction
[15]

Elbw

% of absolute emissions

SBT absolute contraction[15]

As for alignment of the targets, the choice of the benchmark depends on the scenario availability. The selection will be made according to thefollowing process:-Option A: If a specific pathway based on carbon intensity from a ETP scenario is available, the trend in carbon intensity will be asked andanalyzed.

-

Option B: If such a pathway does not exist to date, a default pathway in absolute contraction is applied.

-

Option C: If needed and justified, the analyst can propose a reference pathway meeting ACT requirement (data sourcing, assumptions
robustness …).

Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with theambition of the Beyond-2-Degree Scenario9 (B2DS). If the analyst/company has the choice between two benchmarks, the most ambition scenario
should be used, and must meet at minimum the ambition requirements of the B2DS.

H OW T HE A NA LY SIS

The analysis is based on the Past Action ratio (Apast) which represents the ratio between the company’s recent (reporting year minus 5

WILL B E D O NE

years) emissions intensity from material investment trend gradient and the company’s benchmark recent (reporting year minus 5 years)
emission intensity trend gradient.

9 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

Generic methodology | ACT Initiative | Version 1 | page 39

COMPARISON OF TREND IN PAST EMISSIONS AND TREND IN COMPANY'S BENCHMARKC A LC U LA TI O N OF SC ORE :Past Action ratio is calculated by dividing the company’s emission intensity from material investment trend (between reporting year andreporting year minus 5 years) and the historic benchmark emission intensity (between reporting year and reporting year minus 5 years):

Where EIc(Yr) is the company emission intensity at reporting year, EIc (Yr-5) is the company emission intensity at reporting year minus 5,
EIb(Yr) is the benchmark emission intensity at reporting year and EIb(Yr-5) is the benchmark emission intensity at reporting year minus 5.
If the past action ratio (Apast) is a negative number, a zero score is assigned by default.
If the past action ratio (Apast) is above 1, the maximum score is obtained. Maximum score is 1.
Otherwise, the final score is equal to the value of the past action ratio (Apast).
If the company has several types of assets, the consolidation of the scores assigned to each type of assets will be based on the share ofemissions covered by the assets.

Generic methodology | ACT Initiative | Version 1 | page 40

For instance, a company has two types of assets. Assets of type 1 generate 30% of the direct emissions and the asset of type 2 generate
70% of the emissions. Both types of assets are rated against a specific benchmark. The company gets two scores (1 and 2) for this indicator.
Then, final score = 30%*score 1 + 70%*score 2.

RATIONALE

GE 2.1 TREND IN PAST EMISS IONS INTE NSITY FROM MATERIAL INVES TME NT

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Trends in past emissions intensity from material investment are included in the ACT Generic assessment for the following reasons:

The trend shows the speed at which the company has been reducing its emissions intensity over the recent past. Comparing this to the
low-carbon benchmark pathway on the same historical period gives an indication of the scale of the change that should has been madewithin the company to bring it onto a low-carbon pathway. Recent emissions intensity performance indicates the company’s progression
towards the future emissions intensity necessary to decarbonize in-line with a low-carbon scenario.

The analysis is on the emissions that come from the entire value chain of the company. Therefore, the company’s own emissions might
be impactful. As this is also the emissions source that the company has the most control over, the analysis can expect efforts indecarbonization here.

SC OR I N G R A TI ONA LE:

While ‘gap’ type scoring is preferred for any indicator where possible, this indicator only looks at past emissions, and would therefore requirea different baseline in order to generate a gap method. Therefore, instead the two trends are compared. Another advantage of the trend
analysis is that it does not require the use of a ‘business as usual’ pathway to anchor the data points and aid interpretation, as trends canbe compared directly and a score can be directly correlated to the resulting ratio.

GE 2.2 TREND IN FUTURE EMISSIONS INTENSITY FROM MATERIAL INVESTMENT (WEIGHTING: 0-26,25%)

DESCRIPTION &REQUIRE MENTS

GE 2.2 TREND IN FUTURE E MISS IONS INTE NSI TY FROM MATERIAL INVEST MENT

Generic methodology | ACT Initiative | Version 1 | page 41

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

This metric assesses the alignment of the company’s recent direct emission intensity trend for emissions within the boundaries with the trendof its decarbonization pathway. The company emission intensity trend is computed over a 5 year period from the reporting year (reporting
year plus 5 years).

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦Carbon intensity at reporting year and Y+5, other information if necessary (geography, …), regarding material investment
OR♦

Total direct emissions at reporting year and Y+5

The benchmark indicators involved are:

Target type
Building

Parameter
EIbb

Intensity metrickgCO2/m2

Methodological sources
ACT Real Estate [9] / SDA
service building [17]Transport

Industry energy

EIbt

EIbie

kgCO2/p.km

ACT Auto / ACT Transport

kgCO2/t.km[11]% of absolute emissions

SBT absolute contraction

consumption
Industry direct process –

[15]
EIbrl

Refrigerant leakage

Industry direct process –EIbip[gCO2e refrigerant

RGR EU15 scenario forleaked]/[kg refrigerant in

2030 [7] - Zero leakage

cold equipment]

tolerance in 2050.

% of absolute emissions

SBT absolute contraction

Other industrial process
Waste Management

[15]
Elbw

% of absolute emissions

SBT absolute contraction[15]

Generic methodology | ACT Initiative | Version 1 | page 42

As for alignment of the targets, the choice of the benchmark depends on the scenario availability. The selection will be made according to thefollowing process:-Option A: If a specific pathway based on carbon intensity from a ETP scenario is available, the trend in carbon intensity will be asked andanalyzed.

-

Option B: If such a pathway does not exist to date, a default pathway in absolute contraction is applied.

-

Option C: If needed and justified, the analyst can propose a reference pathway meeting ACT requirement (data sourcing, assumptions
robustness …).

Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with theambition of the Beyond-2-Degree Scenario10 (B2DS). If the analyst/company has the choice between two benchmarks, the most ambition scenario
should be used, and must meet at minimum the ambition requirements of the B2DS.

Other assumptions:
Future emission intensity should be estimated from company assets and their expected produced activity. If future emissions intensity can’tbe estimated from company assets, expected trend in future emissions intensity should be estimated by extrapolating the trend from the last
5 years before the reporting year.

H OW T HE A NA LY SIS

The analysis is based on the Future Action ratio (Afuture) which represents the ratio between the company’s future (reporting year plus 5 years)

WILL B E D O NE

emissions intensity from material investment trend gradient and the company’s future benchmark (reporting year plus 5 year) emission intensity
trend gradient.

10 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

Generic methodology | ACT Initiative | Version 1 | page 43

COMPARISON OF TREND IN FUTURE EMISSIONS AND TREND IN COMPANY'S BENCHMARKC A LC U LA TI O N OF SC ORE :Future Action ratio (Afuture) is calculated by dividing the company’s future emission intensity from material investment trend (between
reporting year and reporting year plus 5 years) and the future benchmark emission intensity (between reporting year and reporting year plus
5 years):

𝐴𝑓𝑢𝑡𝑢𝑟𝑒 =𝐸𝐼𝑐 (𝑌𝑅 ) − 𝐸𝐼𝑐 (𝑌𝑅+5 )
𝐸𝐼𝐵 (𝑌𝑅 ) − 𝐸𝐼𝐵 (𝑌𝑅+5 )Where EIc(Yr) is the company emission intensity at reporting year, EIc (Yr+5) is the company emission intensity at reporting year plus 5
years, EIb(Yr) is the benchmark emission intensity at reporting year and EIb(Yr+5) is the benchmark emission intensity at reporting year
plus 5 years.
If the future action ratio (Afuture) is a negative number, a zero score is assigned by default. In fact, a negative number means that thecompany’s emission intensity is increasing over the period. The company thus gets a score of 0.
Generic methodology | ACT Initiative | Version 1 | page 44

If the future action ratio (Afuture) is above 1, the maximum score is obtained. Maximum score is 1. In fact, a ratio equal or superior to 1means that the emission intensity of the company is reducing at a same or superior rate than the benchmark. The maximum score is thus
obtained.
Otherwise, the final score is equal to the value of the future action ratio (Afuture).
If the company has several types of assets, the consolidation of the scores assigned to each type of assets will be based on the share ofemissions covered by the assets.
For instance, a company has two types of assets. Assets of type 1 generate 30% of the direct emissions and the asset of type 2 generate
70% of the emissions. Both types of assets are rated against a specific benchmark. The company gets two scores (1 and 2) for this indicator.
Then, final score = 30%*score 1 + 70%*score 2.

RATIONALE

GE 2.2 TREND IN EMISS IONS INTE NSITY FROM MATERIA L INVEST MENTR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I NDICA T OR:

IND IC A T OR

Trends in future emissions intensity from material investment are included in the ACT Generic assessment for the following reasons:♦

The trend shows the speed at which the company needs to reduce its emissions intensity for the coming years. Comparing this to the
low-carbon benchmark pathway gives an indication of the scale of the change that needs to be made within the company to bring it
onto a low-carbon pathway.

♦

ACT aims to be future-oriented. Therefore, this particular indicator, with projected emissions intensity and absolute emissions, forms
part of a holistic view of company emissions performance in the past, present, and future.

♦

The analysis is on the emissions that come from the entire value chain of the company. Therefore, the company’s own emissions
might be impactful. As this is also the emissions source that the company has the most control over, the analysis can expect efforts
in decarbonization here.

SC OR I N G R A TI ONA LE

The scoring rationale follows the same narrative as indicator 2.1, so refer to the rationale of this indicator to understand the choices made.

Generic methodology | ACT Initiative | Version 1 | page 45GE 2.3 SHARE OF LOW-CARBON CAPEX (WEIGHTING: 0-8.75%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 2.3 S HARE OF LOW-CARBON CAPEXAn analysis of the share of CAPEX invested in Low-Carbon & Mitigation technologies.

OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

Average share of low-carbon CAPEX (out of total CAPEX) planned for the next three years.

H OW T HE A NA LY SIS

The assessment will assign a maturity score based on the company’s share of planned low-carbon CAPEX, expressed in a maturity matrix.

WILL B E D O NE

A company that is placed in the ‘aligned’ category will receive the maximum score. Companies who are at lower levels will receive a partial
score, with 0 points awarded for having no engagement at all.
This maturity matrix is indicative but does not show all possible options that can result in a particular score. Companies responses will be
scrutinized by the analyst and then placed on the level in the matrix where the analyst deems it most appropriate.

Question
Associated score
What is the share of CAPEX
invested in Low-Carbon &Mitigation technologies (% of
CAPEX)?

Basic

Standard
0%

Below 20%

Advanced

25%

Betweenand 40%

Next practice
75%

50%

20%

Betweenand 60%40%

Betweenand 80%Low-carbonalignedWeight100%

60%
Above 80%

100%

Generic methodology | ACT Initiative | Version 1 | page 46

DEFINING LOW-CARBON & MITIGATION TECHNOLOGIES

Low-carbon & mitigation technologies are the ones meeting the mitigation criteria of the EU Green Taxonomy. The list of eligible
products or services will be detailed in an appendix and is set to be updated with the further development of this taxonomy. A list oftechnologies related to energy is also available in the ACT Oil & Gas sector.

RATIONALE

GE 2.3 S HARE OF LOW-CARBON CAPEXR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Investments planning related to the company’s low-carbon capex are included in the ACT Generic assessment for the following reasons:♦

CAPEX planification is an indicator of corporate commitment to a low-carbon transition, and is a meaningful metric of the company’s
internal planning towards the transition.

Although this indicator is based on a specific ratio in other ACT methodologies, no benchmarks are available for ACT Generic. Therefore,
thresholds have been defined accordingly.

GE 2.4 LOCKED-IN EMISSIONS (WEIGHTING: 0-17.5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

PR ER E QU ISITE

GE 2.4 LOCKED-IN EMISSIONS

Measure of the emissions implied by the company assets portfolio. Locked-in emissions are compared to a theoretical portfolio with a similar
locked activity per year and benchmark emission intensity.

The types of assets covered by this indicator are the following: buildings, transport fleet.

Generic methodology | ACT Initiative | Version 1 | page 47

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Building portfolio: average carbon intensity of buildings owned, in the past 5 years and renovation planned.

♦

Transport fleet:oYear describedoNumber of units deployed / planned to be deployed in the year [Present and future]oNumber of units decommissioned/planned to be decommissioned in the year [Present and future]oNumber of net total units in operation in the year [Present and future]oAnnual secured/planned activity [Future]oPlanned activity [Future]oEmissions from present and planned assets [Present and future]

External sources of data used for the analysis of this indicator are:-

ACT Transport methodology-

ACT Real Estate methodology[9]-SDA – sectoral benchmark pathway definition for service building

The benchmark indicators involved are:
Target type
Building

Parameter
CBre

Intensity metrickgCO2/m2

CBb
Transport

CBtr

BenchmarkACT Real Estate[9] / SDA
service building [17]kgCO2/p.km

ACT Auto[10] / ACTkgCO2/t.km

Transport [11]This metric needs to rely on a physical unit for assets. Therefore, this indicator is only applied for buildings and vehicles in order to be compliant withthe principle of relevancy described earlier in this document and part of the ACT Framework. Also, this indicator requires a high level of details interms of data collection.
Assumptions:

Generic methodology | ACT Initiative | Version 1 | page 48

Locked-in emission should be computed from company’s assets, if the company hasn’t published any plan, assets activity and GHG intensity should
be considered constant from reporting year until expected decommissioning year of the asset. Decommissioning are estimated by using assumptions
on average sectoral asset lifetime if not scheduled by the company.

H OW T HE A NA LY SISWILL B E D O NE

The analysis is based on the ratio between the company’s existing and planned assets’ emissions from the reporting year [LG (t)] to 2050, and theemissions budget entailed by the company’s carbon budget [BG (t)] over the same period of time.
C A LC U LA TI O N OF SC ORE :In order to discover the calculation methodology, please refer to the detailed explanation presented in ACT Transport and ACT Real Estatemethodologies. Refer to the Appendix to have a detailed presentation of the locked-in emissions indicator in the ACT Transport and ACT Real Estatemethodologies.

RATIONALE

GE 2.4 LOCKED-IN EMISSIONS FROM MATERIAL INVEST MENTR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Locked-in emissions are included in the ACT Generic assessment for the following reasons:♦Absolute GHG emissions over time are the most relevant measure of emissions performance for assessing a company’s contribution
to global warming. Furthermore, the concept of Locked-in emissions allows a judgement to be made about the company’s outlook in
more distant time periods than ones of the investment plans.

♦

Analysing a company’s locked-in emissions alongside science-based budgets also introduces the means to scrutinise the potential
cost of inaction, including the possibility of stranded assets.

♦

Examining absolute emissions, along with recent and short-term emissions intensity trends, forms part of a holistic view of a company’s
emissions performance in the past, present, and future.

This indicator only applies for Building and Transport as these assets have been the only ones covered by specific benchmark in order tocalculate Locked-In emissions

Generic methodology | ACT Initiative | Version 1 | page 49

INTANGIBLE INVESTMENTS (WEIGHTING: 0 – 5%)
GE 3.1 R&D IN LOW-CARBON TECHNOLOGIES (WEIGHTING: 0-2.5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

PR ER E QU ISITED A TA R E Q UIR E ME NTS

H OW T HE A NA LY SISWILL B E D O NE

GE 3.1 R&D SPENDING IN LOW-CARBON TECHNOLOGIES

A measure of the ratio of R&D costs/investments in low-carbon technologies. The indicator identifies the ratio between the company’s R&D
investment in low-carbon technologies and total R&D investments.

The company operates in a sector where there are technological stakes regarding low-carbon transition
Relevant and external sources of data used for the assessment of this indicator:♦

R&D costs/investments in low-carbon technologies of the company.

♦

Total R&D costs/investments of the company

1) R&D Investment Share
The assessment is based on the ratio of the company’s ‘annual R&D expenditure on low-carbon technologies’ to the company’s ‘total annual
capital expenditure in R&D’.
2) Final Score
The ratio will be compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for companies
indicating a higher level of maturity, which means a higher share in R&D costs/investments in these technologies.
D EFI NI NG ‘L O W-CARB O N T EC HN O L OG IES’ :A taxonomy has been established by the OECD (OECD Environment Working Papers No. 89 (2015)) [1] in order to quantify the patents inenvironment-related technologies. It can be used to measure environmental innovation, if restricted to climate change mitigation
technologies. It is based on the seven following categories:Environmental management

Generic methodology | ACT Initiative | Version 1 | page 50

Water-related adaptation technologies



Biodiversity protection & ecosystem health

Climate change mitigation related to energyCCS of GHG

Climate change mitigation related to transportation

Climate change mitigation related to building

The matrix is provided below:

Question

BasicStandard

Advanced

Next practice

Associated score
What is the share of
R&D
costs/investments
in low-caron
technologies
compared to thetotal R&D
costs/investments?

0%
The share of
low-carbon
R&D
is below 20%
of total R&D
investments

25%
The share of
low-carbon R&D
is between 20%
and 40% of total
R&D
investments

50%
The share of
low-carbon R&D
is between 40%
and 60% of total
R&D
investments

75%
The share of
low-carbon
R&D isbetween 60%
and 80% of
total R&D
investments

Low-carbon
Aligned100%
The share of
low-carbon
R&D is above
80% of total
R&D
investments.

RATIONALE

GE 3.1 R&D SPENDING IN LOW-CARBON TECHNO LOGIESR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

R&D in low-carbon technologies is included in the ACT Generic assessment for the following reasons:♦Weight100%

To enable the transition, the sector where there are technological stakes relies heavily on the development of low-carbon solutions toreplace its currently high emitting systems♦

R&D is the main proactive action to develop these technologies.

♦

R&D is also one of the main tools to reduce the costs of a technology in order to increase its market penetration.

♦

Aside from technology, companies can also invest into R&D on operational practices to optimize the carbon impact where they havedirect responsibility.

♦

Lastly, the R&D investment of a company into non-mature technologies and practices allows for direct insight in the company’scommitment to alternative technologies that may not currently be part of its main business model.

Generic methodology | ACT Initiative | Version 1 | page 51



Although this indicator is based on a specific ratio in other ACT methodologies, no benchmark are available for ACT Generic. Therefore,
thresholds have been defined accordingly.



GE 3.2 COMPANY LOW-CARBON PATENTING ACTIVITY (WEIGHTING: 0-2.5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

PR ER E QU ISITED A TA R E Q UIR E ME NTS

H OW T HE A NA LY SISWILL B E D O NE

GE 3.2 COMPANY LOW-CARBON PATENTING ACTIVITY

A measure of the company patenting activity related to low-carbon technologies. The indicator identifies the ratio between the company’s
patent activity for the last 5 years and average patenting activity linked to climate change of the sector.

The company operates in a sector where there are technological stakes regarding low-carbon transition
Relevant and external sources of data used for the assessment of this indicator:♦

Patenting activity in climate change mitigation technologies of the company over the last 5 years.

♦

Total patenting activity of the company over the last 5 years

1) Past low-carbon patents activity ratio
The assessment is based on the ratio of the company’s patenting activity dedicated to climate change mitigation technologies over the last 5 years
to the company’s total patenting activity over the same span of time.
2) Final Score
The ratio will be compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for companies
indicating a higher level of maturity, which means a higher share in Climate Change Mitigation Technologies (CCMTs) patenting activity.
D EFI NI NG C LI MATE C HA N GE MIT IG ATI O N TEC H N OL O GIES PATE NT S:

The indicator focuses on patents that mitigate climate change. The European Patent Office (EPO)[2] and the US Patent and Trademark Office(USPTO)[3] have developed a dedicated patent classification scheme (Cooperative Patent Classification - CPC) which details patents for climatechange mitigation or technologies:
Generic methodology | ACT Initiative | Version 1 | page 52

Y02B – CCMTs related to buildings
Y02C – Capture, storage, sequestration or disposal of greenhouse gases
Y02E – Reduction of greenhouse gas emissions, related to energy generation, transmission or distribution
Y02P – CCMTs relating to production in energy intensive industries
Y02T – CCMTs related to transportation
Y02W – CCMTs related to wastewater treatment or waste management(EPO, 2017)
The matrix is provided below:

Question

BasicStandard

Advanced

Next practiceLow-carbonalignedAssociated score

0%

25%

50%

75%

100%

What is the share ofpatents in climate change
mitigation technologies
compared to the total
patent activity over the last
5 years?

The share of
CCMTs patents
is below 20% of
total patents

The share of
CCMTs patents
is between 20%
and 40% of total
patents

The share of
CCMTs patents
is between 40%
and 60% of total
patents

The share of
CCMTs patents
is between 60%
and 80% of total
patents

The share of
CCMTs patents
is above 80% of
total patents

RATIONALE

GE 3.2 COMPANY LOW-CARBON PATENTING ACTIVITY

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Weight100%

The indicator on CCMTs patenting activity is complementary to the one dedicated to R&D in low-carbon technologies, as it monitors thetechnology diffusion whereas R&D expenditures monitor the technology development.
It is included in the ACT Generic assessment for the following reasons:♦

To enable the transition, the sector where there are technological stakes relies heavily on the development of low-carbon solutions toreplace its currently high emitting systems♦

Patent data are commensurable because patents are based on an objective standard (OECD 2015)♦

Patent data measure the intermediate outputs of an inventive process, where R&D data expenditures measure the input (OECD 2015)♦

Patent data can be disaggregated into specific technological fields (OECD 2015)
Generic methodology | ACT Initiative | Version 1 | page 53

RELEVANCE OF THE INDICATOR’S 5-YEAR TIME HORIZON

Patents applications are typically disclosed 18 months after their filing date (OECD 2015). To avoid the effects of this “publication lag” andsmooth the ratio used for the assessment, the indicator monitors the last 5 years of the company’s patenting activity.

SOLD PRODUCT PERFORMANCE (WEIGHTING: 0 – 32%)


GE 4.1 PRODUCT/SERVICE-SPECIFIC INTERVENTIONS (WEIGHTING: 0-11,66%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 4.1 PRODUCT AND SERVICE-SPECIFIC INTERVENT IONS

An analysis of the company’s reporting of mature interventions to reduce GHG emissions (upstream & downstream) for its products andservices and in each category determined as being high GHG impact, compared to other categories of products and services relevant to thecompany.

D A TA R E Q UIR E ME NTS

The questions comprising the information request that are relevant to this indicator are:Intervention on products and services reporting tool

H OW T HE A NA LY SIS

C A LC U LA TI O N OF SC ORE :WILL B E D O NE

To be ready for the transition to a low-carbon economy, companies need to plan and carry out “interventions” within the value chain in order
to exercise their market position and influence to reduce GHG emissions.
For each product/service category, the company identifies interventions that determine the most ambitious impacts achievable by a company
and highlights the GHG hotspots for the different product categories in accordance with best practices (LCA, PCR, PEFCR, etc.). Thisestablishes a relative benchmark. The analyst compares the interventions reported by the company with this benchmark and against otherinterventions reported by other reporting companies, whereby the analyst assigns a ‘maturity scoring’ to the reported interventions.

Generic methodology | ACT Initiative | Version 1 | page 54

Several measures are combined to assign a score to the intervention. These measures are:●

Intervention maturity scoring●

Level of ambition●

Carbon mitigation potential●

Extent or size of the intervention●

Correspondence between the product/service life cycle phase the intervention targets and the highest GHG impact life cycle phase of
the product/service●

Contribution to the overall potential emissions (Optional)Intervention maturity scoring
This assesses how advanced the intervention is relative to current practice, and other elements that can ensure its success like clear goals
and measures of success, use of supporting technology, use of certification and verification.
Level of ambition
The company shall report on the level of ambition of the intervention. The first level is an incremental improvement (e.g. packaging reduction).
The second level is a complete product/service redesign, which consists of a new development (e.g. full product reparability to increase
lifetime). The third level is a breakthrough innovation (e.g. replacing an electronic product with a low-tech solution that is no energy-using
product).
Carbon mitigation potential
Only interventions that are verifiable and significantly reduce GHG emissions shall receive a non-zero score. It is not expected that a verification
be performed, however a methodology must be in place to reliably assess or measure the GHG emissions reduction, which could be verified
by a third party. The greater the GHG reduction resulting from the intervention, the higher the carbon mitigation potential.
Significance and extent of the intervention
Whether the intervention is large or small in scale affects its overall level of impact on GHG emissions. Large-scale interventions receive morepoints (e.g. significant interventions covering a high percentage of a product/service category).

Generic methodology | ACT Initiative | Version 1 | page 55

Correspondence between the product/service life cycle phase, the intervention targets and the highest GHG impact life cycle phaseof the product/service
To effectively reduce GHG emissions, interventions should target the life cycle phases or processes of product/service systems with the highest
portion of GHG emissions attributed to them, so this is awarded more points.
The scorings for the product/service categories reported on (covering at least 70% of total product/service emissions) are then aggregated into
a numerical value. The analyst assigns a scoring to all interventions reported. This exercise can make future analyses more robust, as better
understanding is developed of how the RT sector is undertaking activities to reduce emissions in the value chain.
Contribution to the overall potential emissions (Optional)
This indicator is relevant for companies that operate upstream in a value chain of a product/service that can be considered “low-carbon”
referring to the EU Green taxonomy. This indicator evaluates the contribution of a semi-finished product/service or an equipment in the
reduction of a final product/service. (e.g., contribution of tires in the reduction of emissions of a vehicle).
Evaluation level

Basic

Advanced

Low-carbon practice

Weight

Score

0%

50%

100%

Intervention maturity
scoring

Intervention is common
practice and not backed withsuccess factors like planning,
adequate resources, clear
goals, performance tracking
and measures of success.

Intervention is an advanced
practice and backed withsome success factors likeplanning, adequate resources,
clear goals, performancetracking, and measures ofsuccess.

Intervention is cutting-edge
innovation practice andbacked with all relevant
success factors like planning,
adequate resources, clear
goals, performance tracking
and measures of success.

20% or16,6%

Level of ambition

Incremental improvement

Product/service redesign

Breakthrough innovation

20% or16,6%

Carbon mitigation
potential

Not significant or notverifiable

Significant and verifiable

Drastic and verifiable

20% or
16,6%

Generic methodology | ACT Initiative | Version 1 | page 56

Extent or size of theintervention

Correspondence
between the
product/service life
cycle phase theintervention targets andthe highest GHG impact
life cycle phase of the
product/service (*)

What is the contribution
to overall potential
emissions (Optional)*?

Intervention involves
products/services thattogether represent a marginal
share of the soldproduct/service emissions in
the category.
Intervention does not impact
any of the most relevant life
cycle phase(s) or processesof the product/service(s) interms of GHG emissions.

Intervention involves
products/services thattogether represent asignificant share of the soldproduct/service emissions in
the category.
Intervention impacts a
relevant life cycle phase orprocess of the
product/service(s) in terms of
GHG emissions.

Intervention involves
products/services thattogether represent the major
share of the soldproduct/service emissions in
the category.
Intervention clearly targets
and impacts the most relevant
life cycle phase(s) orprocesses of the
product/service(s) in terms of
GHG emissions.

20% or16,6%

Below 20%

Between 20 and 50%

Above 50%

0% or
16,6%

20% or16,6%* Only for companies that operate upstream in a value chain of a product/service that can be considered “low-carbon” referring to the EU Green
taxonomy.

RATIONALE

GE 4.1 PRODUCT /SERVICE-SPECIFIC INTERVENTIONSR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I NDICA T OR:

IND IC A T OR

This method aims to assess all product/service-specific dimensions of a low-carbon transition. The objective of this indicator is to measure
the company's "interventions" on its products / services, i.e. the actions taken to reduce the carbon impact of its products / services. This
indicator is applicable either for companies that are multiproduct/service, or for companies that are monoproduct. The criteria“Correspondence between the product/service life cycle phase the intervention targets and the highest GHG impact life cycle phase of the
product/service” in the maturity matrix is used to check that the intervention targets the most material issues on the product.

While other sectors in the ACT Initiative have activity-specific indicators (e.g. generation emissions for electric utilities, fleet emissions forcar companies) that can account for the majority of their total emissions, this is not the case for the Generic approach, where emissions
Generic methodology | ACT Initiative | Version 1 | page 57

sources are scattered across the value chain and have different points of origin. To address all emissions, different types of actions arenecessary to address different types of emissions sources. Furthermore, this multidimensionality means that large efforts, such as Life Cycle
Assessments (LCA), are needed to accurately gain insight and information on exactly where the significant emissions sources are and what
can be done about them from each company’s point of view. It is commonly understood that this information is scarce among companies,
which operate in many different sectors and often have a large number of different tiers in their supply chains, requiring large transaction
costs and research to obtain complete information.
SC OR I N G R A TI ONA LE:

A key issue with the interventions approach is that if interventions have no measurable impact on GHG emissions, they are effectively
assimilated to “greenwashing”. However, we recognise that, when attempting to influence GHG emissions outside of direct operations,
measurement may be difficult. It could be technically feasible yet impractical because of time or cost considerations. GHG emissions
reductions may also not occur immediately, or methodological approaches for measurement may be lacking. Barriers to measurement should
not be barriers to action, therefore the analysis will consider interventions where the GHG emissions mitigation has not been measured.
Nonetheless, companies should describe the rationale for emissions reduction connected to the intervention so that it is clear this potential
exists.
The reporting should also include, where possible, enough detail on mitigation potential, and the scale of impact expected, to distinguishbetween interventions that could be considered tokenism or greenwash and those with a material, positive climate change mitigation impact.

Generic methodology | ACT Initiative | Version 1 | page 58



GE 4.2 PRODUCT/SERVICE SPECIFIC PERFORMANCE (WEIGHTING: 0-11,66%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 4.2 PRODUCT /SERVICE SPECIFIC PERFORMA NCE

An analysis of the company’s purchased or sold products/service performance for products/service with existing and reliable benchmark.

OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

Carbon intensity of the purchased or sold products/services (for products/services with a sectoral benchmark) at Y-5 and reporting year.

Absolute emissions of the purchased or sold products/services (for other products/services) at Y-5 and reporting year.

The benchmark indicators involved are:
Target type

Vehicleemissions

intensity(ScopeParameter

𝐶𝐵𝑃𝑃1

Intensity metricgCO2e/tonne.km

Benchmarkor

ACT Auto[10]gCO2e/passenger.km

1+2+3)
emissions

𝐶𝐵𝑃𝑃2

gCO2/tonne of cement

ACT Cement [12]Oil & Gas products

𝐶𝐵𝑃𝑃3

tCO2/TJACT Oil & Gas [13]Cementintensity

emissions intensity

Generic methodology | ACT Initiative | Version 1 | page 59

Glassproducts

𝐶𝐵𝑃𝑃4

TBD

ACT Glass

𝐶𝐵𝑃𝑃5

TBD

ACT Pulp & Paper

𝐶𝐵𝑃𝑃6

TBD

ACT Iron & Steel

𝐶𝐵𝑃𝑃7

TBD

ACT Food

𝐶𝐵𝑃𝑃8

TBD

ACT Aluminium% of absolute emissions

SBT

emissions intensity

Pulp & Paper products
emissions intensity

Iron & Steel emissions
intensity

Food

productsemissions intensity

Aluminium emissions
intensity

Purchased
products/services

TBC

absolute

contraction

NB: When finished, all upcoming methodologies covered by a specific ACT methodology will be integrated in ACT Generic methodology
As for alignment of the other quantitative indicators, the choice of the benchmark depends on the scenario availability. The selection will be madeaccording to the following process:-Option A: If a specific pathway based on carbon intensity from a ETP scenario is available, the trend in carbon intensity will be asked andanalysed,-

Option B: If such a pathway does not exist to date, a default pathway in absolute contraction is applied.

Generic methodology | ACT Initiative | Version 1 | page 60

H OW T HE A NA LY SIS

For each of the following purchased or sold products/services, the analysis is based on the difference between the purchased or sold

WILL B E D O NE

products/services’ recent (reporting minus 5 years) emissions intensity or absolute emissions (of total purchased or sold products/services)
trend gradient (𝐶𝑅′𝑖𝑖 ) and the purchased or sold products/services’ low-carbon benchmark pathway trend gradient (𝐶𝐵′𝑖𝑖 ) in the short-term(reporting year plus 5 years)
𝐶𝑅′𝑖𝑖 is the gradient of the linear trendline of the purchased or sold products/services’ recent emissions intensity or absolute emissions (𝐶𝑅𝑖𝑖 )𝐶𝐵′𝑖𝑖 is the gradient of the linear trendline of the purchased or sold products/services’ benchmark pathway for emissions intensity (𝐶𝐵𝑖𝑖 ). The
purchased or sold products/services’ benchmark is defined from the purchased or sold products/services’ current emissions on reporting
year, and from the relevant sectoral benchmark (cf. relevant ACT sectoral methodology)
The difference between (𝐶𝑅′𝑖𝑖 ) and (𝐶𝐵′𝑖𝑖 ) will be measured by their ratio (𝑟𝑇𝑖𝑖 ). This is the ‘Transition ratio” which is calculated by the following
equation, with the symbol used to denote gradients:

𝑟𝑇𝑖𝑖 =

𝐶𝑅′𝑖𝑖
𝐶𝐵′𝑖𝑖

If the transition ratio is a negative number, it means the company’s purchased or sold product/service’s recent emissions intensity has
increased (positive 𝐶𝑅′𝑖𝑖 ) and a zero score is awarded by default. If the company’s purchased or sold product/service’s recent emissions
intensity has decreased, the transition ratio will be a positive number. The value of the ratio is capped at 1, which represents the maximum
score. A score is assigned as a percentage value equal to the value of (1 = 100%).
In particular for the following items, the assessment method is implemented as follow:
Purchased products/services
𝐶𝑅′𝑃𝑃 is the gradient of the linear trendline of the purchased products/services’ recent emissions intensity or absolute emissions (𝐶𝑅𝑃𝑃 )𝐶𝐵′𝑃𝑃 is the gradient of the linear trendline of the purchased products/services’ benchmark pathway for emissions intensity (𝐶𝐵𝑃𝑃 ).
Sold products/services-

Transport

𝐶𝑅′𝑆𝑃1 is the gradient of the linear trend line of the sold vehicles’ recent emissions intensity (𝐶𝑅𝑆𝑃1 ).
𝐶𝐵′𝑆𝑃1 is the gradient of the linear trend line of the sold vehicles’ benchmark pathway for emissions intensity (𝐶𝐵𝑆𝑃1 ). The sold vehicles’
benchmark is defined from the sold vehicle’s current emissions on reporting year, and from the relevant sectoral benchmark (cf. ACTTransport methodology)-

Electric Utilities

Generic methodology | ACT Initiative | Version 1 | page 61

𝐶𝑅′𝑆𝑃2 is the gradient of the linear trend-line of the company’s recent sold products/services’ generation emissions intensity (gCO2e/kWh) ofgross electricity generation over time.
𝐶𝐵′𝑆𝑃2 is the gradient of the linear trend-line of the company’s sold products/services’ performance benchmark pathway. Refer to the ACTElectric Utilities methodology for details on the computation of the company’s sold products/services performance specific low-carbon
benchmark pathway and its trend line.
For other sold or purchased products/services, the assessment method presented is implemented.
The score of the indicator is obtained by weighting the different sub-scores by the weight of the products/services assessed in the total
emissions of purchased and sold products/services.

RATIONALE

GE 4.2 PRODUCT /SERVICE SPECIFIC PERFORMA NCE

R A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

This methodology covers heterogeneous sectors with companies situated at different levels of the value chain. This heterogeneity cantherefore also be encountered in the levers that each company has to decarbonize its activities. To assess the upstream and downstream
emissions of all those companies, a general qualitative indicator is relevant (cf. 4.1. Product specific interventions).
However, wherever it is possible the ACT methodology prefers to assess companies through quantitative indicators. That is the purpose of
the product/service specific performance indicator. This indicator gathers quantitative benchmarks built during the development of other ACT
methodologies.
SCORING RATIONALE

This indicator is where the main differences between the company’s purchases and sales and the relevant benchmarks are assessed. Ideally,
this would be done on a future date, whereby the company’s sales and purchases projections would dictate the company’s pathways.
However, because of the confidentiality/uncertainty of such data, this is not a very robust approach. While it may be possible to do withimprovements on data availability, we are aiming to use more available past data.

Generic methodology | ACT Initiative | Version 1 | page 62

GE 4.3 SHARE OF LOW-CARBON PRODUCTS/SERVICES (WEIGHTING: 0-11,66%)



DESCRIPTION &REQUIRE MENTS

SH OR T

GE 4.3 S HARE OF LOW-CARBON PRODUCTS/SERV ICES

An analysis of the company’s share of low-carbon products/services

D ESC R IPTI O N
OF IN D IC A T OR

D A TAR EQ UIR E ME NTS

H OW T HE
A NA LY SIS WILLB E D O NE

The relevant data for this indicator are:

Share of turnover generated by low-carbon products/services (out of total turnover) at Y

The assessment is based on the share of low-carbon products/services, i.e. for instance products meeting the mitigation criteria of the EU Green
Taxonomy in sectors covered by the EU Green Taxonomy.
C A LC U LA TI O N OF SC ORE :The share of low-carbon products/services will be compared to the maturity matrix developed to guide the scoring and a greater number of points willbe allocated for companies indicating a higher level of maturity, which means a higher share of low-carbon products/services.
DEFINING LOW-CARBON PRODUCT/SERVICE







If the company is a sector covered by the EU Green Taxonomy, then low-carbon products/services are the ones meeting the mitigation criteriaof the EU Green Taxonomy. The list of eligible products/services will be detailed in an appendix and is set to be updated with the further
development of this taxonomy.
If the company is in a sector not covered by the EU Green Taxonomy, the company can introduce its definition of low-carbon products/services,justifying it with proofs and using existing frameworks (e.g. EU Ecolabels, Life-cycle assessment (LCA) / Product Environmental Footprint (PEF)
analyses)
The analyst will check the robustness of the definition proposed

Generic methodology | ACT Initiative | Version 1 | page 63

The matrix is provided below:
Question

BasicStandard

Advanced

Next practiceLow-carbon aligned

Associated score

0%

25%

50%

75%

100%

What is the share of
low-carbon
products/services(% of revenue)?

The share of lowcarbon
products/services isbelow 20% of total
revenue

The share of lowcarbon
products/services is
between 20% and
40% of total
revenue

The share of lowcarbon
products/services is
between 40% and
60% of total
revenue

The share of lowcarbon
products/services is
between 60% and
80% of total
revenue

The share of lowcarbon products/
services is above
80% of total
revenue

Weight100%

RATIONALE

GE 4.3 S HARE OF LOW-CARBON PRODUCTS/SERVICESR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Share of low-carbon product/service in the total turnover of the company is included in the ACT Generic assessment for the following reasons:♦Low-carbon sales are an indicator of corporate commitment to a low-carbon transition, and are a meaningful metric of the company’s
performance towards the transition. It indicates how its products/services will contribute to decarbonize the downstream of the value
chain.
SCORING RATIONALE

As there is no quantitative definition available regarding the share of low-carbon products/services in the total revenue of companies, thebest way to assess the performance in this indicator is to compare the share of low-carbon products/services to a maturity matrix.
With the further development of EU Green Taxonomy, quantitative benchmarks are likely to be built. The methodology may be updated tointegrate such benchmarks as soon as they are available.



GE 4.4 SUB-CONTRACTED TRANSPORT SERVICE PERFORMANCE (WEIGHTING: 0-8,75%)

DESCRIPTION &REQUIRE MENTS

GE 4.4 S UB-CONTRACTED TRANSPORT SERVICE PERFOR MANCE

Generic methodology | ACT Initiative | Version 1 | page 64

SH OR T D ESC R IPT IO N

This indicator is a qualitative assessment of the degree of knowledge the company has about its transport service subcontractors’

OF IN D IC A T OR

performance, and about the subcontractors’ performance itself.

PR ER E QU ISITE

The company is provided with transport services by a subcontractor AND transport is significant in the company’s GHG emissions (“General
information sheet”)

D A TA R E Q UIR E ME NTS

H OW T HE A NA LY SISWILL B E D O NE

The relevant data for this indicator are:

The reporter shall provide details on its knowledge of its subcontractors’ projected emissions (metric tonne CO2e) [Future]

The reporter shall provide details on its knowledge of its future activity sub-contracted (tonne.km) [Future]

The reporter shall provide details on its knowledge of its subcontractors’ low-carbon vehicles [Future]

The reporter shall provide details on its knowledge of its subcontractors’ actions for emissions reduction [Future]

The analysis will look at the following dimensions:

If the company has a good forecast on the subcontracted activity

If the company is able to determine future emissions from its subcontractors, and if the intensity follows the low-carbon benchmark pathway



If the subcontractors fleet include low-carbon vehicles

If the subcontractors carry out actions of GHG emissions reduction on its vehicles (other than purchasing new ones) and on operations

The analysis uses the following matrix:

Question

BasicStandard

Advanced

Next practiceLow-carbon aligned

Associated score

0%

25%

50%

75%

100%

WeightGeneric methodology | ACT Initiative | Version 1 | page 65

Future emissions
assessment:
Are you able todetermine withcertainty (verified)
future CO2
emissions intensity
linked to
subcontracting?

No knowledge ofsubcontractor’s
fleet carbon
intensity

The company requires
its subcontractors toreport their GHG
emissions linked totheir activity on thereporting year

Robust CO2 data on
subcontracted
current activity(reporting year) is
certified by third
party

Robust CO2 data on
subcontracted current
activity (reportingyear) is certified bythird party
Future CO2 emissions
intensity of
subcontractors is
forecast but theintensity is not 2°CalignedRobust CO2 data on
subcontracted
current activity(reporting year) is
certified by third
party
Future CO2
emissions intensityof subcontractors is
forecast, and theintensity is alignedwith a well-below
2°C scenario

20%

Future activity
assessment:
Are you able toforecast the level ofyour activity
performed bysubcontractors in
the future?

No knowledge of
futuresubcontracted
activity.

Future subcontracted
activity known for the
next 3 years

Futuresubcontracted
activity known for
the next 5 years-

Futuresubcontracted
activity known for
the next 10 years

20%

Low-carbon
vehicles:Does the projected
fleet include lowcarbon vehicles andenergies? (100%elec, hybrid, H2,
BioGNV...)No knowledge of
The share of lowThe share of lowThe share of lowthe share of lowcarbon vehicles in the
carbon vehicles incarbon vehicles in the
carbon vehicles in sub-contracted fleet is the sub-contracted sub-contracted fleet isthe subcontractors’at least 20% of the
fleet is at least 60%
at least 80% of the
fleetslow-carbonof the low-carbon
low-carbon
benchmark value overbenchmark valuebenchmark value overthe next 3 years after over the next 3 years 5 years after reporting
reporting year.
after reporting year.
year.

The share of lowcarbon vehicles inthe sub-contracted
fleet is equal to the
low-carbon
benchmark value
over 10 years after
reporting year.

20%

Generic methodology | ACT Initiative | Version 1 | page 66

GHG emissions
reduction onmaterial:
Are yoursubcontractors
implementing
significant actions
for GHG emissions
reduction of thematerial other thanpurchase of newvehicles?

No action of
reduction planned

2 actions at most are
currently
implemented bysubcontractors that
aggregate into at least
20% of GHG
emissions fromsubcontracted activity

3 to 4 actions are
currently
implemented orplanned in near
future bysubcontractors that
aggregate into atleast 40% of GHG
emissions fromsubcontracted
activity

5 actions are currently At least 5 actions are
implemented or
currently
planned in near future
implemented orby subcontractors
planned in nearthat aggregate into at
future byleast 50% of GHG
subcontractors thatemissions fromaggregate into at
subcontracted activity
least 80% of GHG
emissions fromsubcontracted
activity

20%

GHG emissions
reduction on
operation:
Are yoursubcontractors
implementing
significant actions
for GHG emissions
reduction ofoperations?

No action of
reduction planned

2 actions at most are
currently
implemented bysubcontractors that
aggregate into at least
20% of GHG
emissions fromsubcontracted activity

3 to 4 actions are
currently
implemented orplanned in near
future bysubcontractors that
aggregate into atleast 40% of GHG
emissions fromsubcontracted
activity

5 actions are currently At least 5 actions are
implemented or
currently
planned in near future
implemented orby subcontractors
planned in nearthat aggregate into at
future byleast 50% of GHG
subcontractors thatemissions fromaggregate into at
subcontracted activity
least 80% of GHG
emissions fromsubcontracted
activity

20%

Actions eligible for the dimension “GHG emissions reduction on material” are the following [5] [17] [18] [37] [38]:Fuel efficiency devicesPreventive maintenance

Speed limitation devices

Predictive cruise control devices

Real-time fuel economy monitors (linked to driving methods)



Tire pressure monitoring systems

Low rolling resistance tires



Improvement of ship hull surface / hull cleaningAir lubrication of the hullWaste heat recovery from ship engine or exhaust gas

Generic methodology | ACT Initiative | Version 1 | page 67

Reduce weight of internal equipment and interior design in aircrafts

Actions eligible for the dimension “GHG emissions reduction on operation” are the following [5] [17] [18] [37] [38]:

Eco-driving

Routing optimization



Load factor optimization

Reduction of empty runs



Improve backhauling

Speed regulation with Intelligent Speed Adaptation



PlatooningRe-timing urban deliveries to off-hours

Co-loading

Speed limitation in shippingParticipate in smoother ship-port interface to reduce waiting time of ship and optimize berths planningOnshore power supply for ships in ports

Other actions than the ones listed above may be eligible, if judged relevant by the analysts, for each action reported, the company shall describe:The type of actionThe goals

The implementation process

The monitoring of the action

The results obtained for the reporting year

RATIONALE

GE 4.4 S UB-CONTRACTED TRANSPORT SERVICE PERFOR MANCER A TIO NA LE OF T HE

RELEVANCE OF THE INDICATOR:IND IC A T OR

This indicator is used in the ACT Transport methodology.
It stands as a mirror of indicators 2.1 assessing material investments of the company about its direct emissions from transport activities, buthere it assesses the performance of the subcontractors.

Generic methodology | ACT Initiative | Version 1 | page 68

It is necessary that the company investigates about its transport services subcontractors’ performance, especially if a large part of thetransportation activity is subcontracted, because its own performance depends on it. Some focus is made on the capacity of the company tocollect data from its transport services subcontractors, because it is the first necessary step toward a full picture of its carbon impact, and it
shows commitment for a low-carbon transition.
SCORING RATIONALE:

This indicator is assessed by a maturity matrix, because companies subcontracting their transport service face a lack of data from theirsubcontractors. Nonetheless, this indicator encourages companies to dialogue with their subcontractors and to set up a data collection
process. Therefore, high levels of the matrix correspond to the ability to collect data that would be necessary to compute indicator frommodule 2. The aim of this indicator is to value companies that have transport services subcontractors with good carbon performance, so thehighest level of the matrix corresponds to subcontractor’s performance aligned with the low-carbon benchmark pathway.
The various dimensions of the maturity matrix are weighted as follows:

Dimension

WeightFuture emissions assessment

20%

Future activity assessment20%

Low-carbon vehicles

20%

GHG emissions reduction on material

20%

GHG emissions reduction on operation

20%

Spot contract is a common subcontracting practice in the transport sector, and it makes data collection very difficult for companies. Therefore,
the maturity matrix of this indicator shall be used only to score subcontractors under “long-term” contract. The score obtained is then adjustedwith the share of GHG emissions represented by spot contracts. The final score is computed as follows:

Generic methodology | ACT Initiative | Version 1 | page 69

Share of GHG emissions from

Finale Score

SPOT contracts

0% - 24%

100% * matrix score25% - 49%

80% * matrix score

50% - 74 %60% * matrix score

75 % - 100%40% * matrix score

It was decided to exclude spot contracts from the assessment with this maturity matrix, as it seemed hardly feasible to collect relevant datafrom such subcontractors, or to design adequate but nonetheless as ambitious maturity levels as for long-term contracts. Having few or poorquality data should not be an excuse for bad carbon performance.

Generic methodology | ACT Initiative | Version 1 | page 70

MANAGEMENT (WEIGHTING: 10%)


GE 5.1 OVERSIGHT OF CLIMATE CHANGE ISSUES (WEIGHTING: 3%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N O F

GE 5.1 OVERS IGHT OF CLIMATE CHA NGE IS SUESThe company discloses that responsibility for climate change within the company lies at the highest level of decision-making within the company

IND IC A T OR

structure.

D A TA R E Q UIR E M E NTS

The relevant data for this indicator are:♦Environmental policy and details regarding governance♦

The reporter shall provide details on where is the highest level of direct responsibility for climate change within the organization

External sources of data may also be used for the analysis of this indicator.

H OW T HE A NA LY SIS

The benchmark case is that climate change is managed within the highest decision-making structure within the company. The company situation will be

WILL B E D O NE

compared to the benchmark case, if it is similar then points will be awarded.
The position at which climate change is managed within the company structure will be determined from the company data submission and accompanying
evidence.

Generic methodology | ACT Initiative | Version 1 | page 71

Question
Associated score

What is the position of
the employee/ committeewith highest
responsibility for climatechange?

BasicStandard0%

No one in chargeof climatechange issues

25%Manager /officer

Advanced

Next practiceLow-carbon'aligned

50%

75%

100%

Senior Manager/
Officer

SeniorManager/Officer
closely related todecision-making
structure within
the company

Board orindividual/subset of the board
or othercommittee
appointed by theboard

Weight100%

RATIONALE

GE 5.1 OVERS IGHT OF CLIMATE CHA NGE IS SUESR A TIO NA LE OF T HE

Successful change within companies, such as the transition to a low-carbon economy, requires strategic oversight and buy-in from theIND IC A T OR

highest levels of decision-making within the company. Evidence of how climate change is addressed within the top decision-making
structures is a proxy for how seriously the company takes climate change, and how well integrated it is at a strategic level. High-levelownership also increases the likelihood of effective action to address low-carbon transition.
Changes in strategic direction are necessarily future-oriented, which fits with this principle of the ACT project.
Managing oversight of climate change is considered as a good practiceGeneric methodology | ACT Initiative | Version 1 | page 72

GE 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY (WEIGHTING: 3%)

DESCRIPTION&REQUIRE MENTSSH OR T
D ESC R IPTIGE 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITY

Company board or executive management has expertise on the science and economics of climate change, including an understanding of policy, technology
and consumption drivers that can disrupt current business.

ON
OF
IND IC A T OR

D A TAThe relevant data for this indicator are:

R EQ UIR E M♦

Environmental policy and details regarding governance

ENTS

♦

The reporter shall identify the position of the individual or name of the committee with this responsibility and outline their expertise regarding climatechange and the low-carbon transition

External sources of data may also be used for the analysis of this indicator.
H OW T HE

The presence of expertise on topics relevant to climate change and the low-carbon transition at the level of the individual or committee with overall

A NA LY SIS

responsibility for it within the company is assessed. The presence of expertise is the condition that must be fulfilled for points to be awarded in the scoring.

WILL B E
D O NEThe analyst determines if the company has expertise as evidenced through a named expert biography outlining capabilities. A cross check is performed
against 5.1 on the highest responsibility for climate change, the expertise should exist at the level identified or the relationship between the
structures/experts identified should also be evident.

Generic methodology | ACT Initiative | Version 1 | page 73

Question

Subdimension

Associated score

Does this
employee/com
mittee have a
provenexpertise
regardingclimate change
topicsThe
presence ofexpertiseon relevant
topics toclimatechange andlow-carbon
transition
within theindividual
orcommittee
with overallCC
responsibili
ty

Basic

Standard

Advanced

Next practiceLow-carbonaligned

0%

25%

50%

75%

100%

The
employee/committ
ee does not meetthe following
characteristics:- academic
background/profe
ssional training
related to energy& climate change,- formerexperiences on
climate issues,- technicalknowledges on
climate (based onstatements,
published reports,…).
Therefore,
expertise is notevident.

The
employee/committ
ee meets severalof the following
characteristics:- academic
background/profe
ssional training
related to energy& climate change,- formerexperiences on
climate issues,- technicalknowledges on
climate (based onstatements,
published reports,…).

The
employee/committ
ee meets all thefollowing
characteristics:- academic
background/profe
ssional training
related to energy& climate change,- formerexperiences on
climate issues,- technicalknowledges on
climate (based onstatements,
published reports,…).

The
employee/committ
ee meets all thefollowing
characteristics:- academic
background/profe
ssional training
related to energy& climate change,- formerexperiences on
climate issues,- technicalknowledges on
climate (based onstatements,
published reports,…).
Expertise isclosely related todecision-making

Theemployee/committ
ee meets all thefollowing
characteristics:- academic
background/profe
ssional training
related to energy& climate change,- formerexperiences on
climate issues,- technicalknowledges on
climate (based onstatements,
published reports,…).
Expertise iscompletely
integrated indecision-making

Weig
ht

100%

Elements of biography outlining expertise might be:-

Achievement of a course with a focus on climate change-

Training in climate change subjects by a certified organism-

Previous experience in an organization specialized in climate change (consulting companies in transition, NGO, …)

Supervision of studies to assess climate change impact on business and business impact on climate change

Generic methodology | ACT Initiative | Version 1 | page 74

RATIONALE

GE 5.2 CLIMATE CHANGE OVERSIGHT CAPABILITYR A TIO NA LE OF T HE

Effective management of the low-carbon transition requires specific expertise related to climate change and its impacts, and their likely direct

IND IC A T OR

and indirect effects on the business. Presence of this capability within or closely related to the decision-making bodies that will implement
low-carbon transition both indicates company commitment to that transition and increases the chances of success.

Even if companies are managing climate change at the Board level or equivalent level, a lack of expertise could be a barrier to successful
management of low-carbon transition.

Generic methodology | ACT Initiative | Version 1 | page 75GE 5.3 LOW-CARBON TRANSITION PLAN (WEIGHTING: 2%)

DESCRIPTION &REQUIRE MENTSSH OR T

GE 5.3 LOW-CARBON TRANSIT ION PLAN

The company has a plan on how to transition the company to a business model compatible with a low-carbon economy.

D ESC R IPTIONOFIND IC A T OR

D A TAThe relevant data for this indicator are:

R EQ UIR E M♦

Environmental policy and details regarding governance

ENTS

♦

The reporter should provide the following description of the transition plan including the following details:♦

Whether the transition plan exists in a documented form and whether that document is public♦

How the results of scenario testing influenced the transition plan♦

Timescale for implementation of the transition plan♦

Who has responsibility for its implementation (at the strategic, not operational, level)

How successful implementation of the plan will be measured and monitored. (Should include details of any linked targets, emissions reduction or energy
efficiency targets, or KPIs.)
H OW T HE

The analyst evaluates the description and evidence of the low-carbon transition plan for the presence of best practice elements and consistency with the other reported man

A NA LY SIS

description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points are allocated for elements indicating a highe

WILL B E

Among the best practice elements identified to date are:

D O NE♦The plan includes financial projections♦

The plan should include cost estimates or other assessments of financial viability as part of its preparation♦

The description of the major changes to the business is comprehensive, consistent, aligned with other indicators♦

Quantitative estimates of how the business will change in the future are included♦

Costs associated with the plan (e.g. write-downs, site remediation, contract penalties, regulatory costs) are included♦

Potential “shocks” or stressors (sudden adverse changes) have been taken into consideration
Generic methodology | ACT Initiative | Version 1 | page 76

♦Relevant region-specific considerations are included♦

The plan’s measure of success is SMART - contains targets or commitments with timescales to implement them, is time-constrained or the actions anticipated are♦

The plan’s measure of success is quantitative♦

The description of relevant testing/analysis that influenced the transition plan is included♦

The plan is consistent with reporting against other ACT indicators♦

The scope should cover entire business, and is specific to that business♦

The plan should cover the short, medium and long terms. From now or the near future <5 years, until at least 2035 and preferably beyond (2050)♦

The plan contains details of actions the company realistically expects to implement (and these actions are relevant and realistic)♦

The plan is approved at the strategic level within the organisation♦

Discussions about the potential impacts of a low-carbon transition on the current business have been included♦

The company has a publicly-acknowledged 2°C (or beyond) science-based target (SBT)♦The company has been carrying out a diagnosis of climate change impacts and identified related physical risks

The maximum score (100%) is assigned if all of these elements are demonstrated.

Generic methodology | ACT Initiative | Version 1 | page 77

Subdimension
Associatedscore
Level ofapproval within
theorganisation

Measure of
success

Financial
content in plan

Futureconsiderations

Basic

Standard0%

Not known

No measure of
success

No financial
content

Implications tofuture businessnoted but notdiscussed
properly

25%

Advanced
50%

Next practice75%

Low-carbonalignedWeight100%
Matcheshighest level of
responsibility
as previously
reported

Operational level (CSR
level)

Upper management
level

Board / StrategiclevelMeasure of success ismainly qualitative

SMART KPI: specific,
measurable,
acceptable, realistic,
time bound.

Measure of successis SMART. Measureof success contains
both qualitative andquantitative targets.

Measure of
success isquantitative

20%

Financial projections,cost estimates orother estimates offinancial viability arelaid out OR short-term
actions to start
implementing plan arequantified in moredetailQuantitative
estimations of how
the business willchange in the future
are included
Costs associatedwith the plan (e.g.
write-downs, site
remediation,
contract penalties,
regulatory costs)
are included

Description of
the major
changes to thebusiness iscomprehensive,
consistent,aligned withother indicators

8%

Contains
discussion of thepotential portfolioof a future, lowcarbon readycompany

Contains one ormore elaborate
outlines of how
the far-futurecompany could
look like interms ofphysical assets
and business
model

8%

Financial projections,cost estimates or otherestimates of financial
viability are describedbut not quantified

Contains actions thecompany expects toimplement to makethe transition a
reality without any
details

Contains discussion
certain current
company elementsthat need to bechanged to make thetransition a reality

15%

Generic methodology | ACT Initiative | Version 1 | page 78

List of short-term
considerations andremedial actions
integrated in theplanContains discussionof the potential
impacts of a lowcarbon transition on
the current business
Relevant regionspecificconsiderations areincluded

The scope covers
the entire business

Plan is consistent
with reporting against
other ACT indicators
Contains a
description of
relevant
testing/analysis

Covers only
short-term(< 3 years)

Covers only medium
term (< 5 years)

Should cover the
short, medium andlong term. From now
or near future <5years, until at least 10
years and preferably
beyondThe company
does notconsider climate
issues related toits activities andremains passivein the face ofclimate risks

The company has been
carrying out adiagnosis of climatechange impacts on:
The physicalintegrity andoperation ofassetsSupply ofgoods orservices which
depends on
climateconditions
Demand ofproducts orservices
submitted toclimateconditions

Current
considerations
and plans

Short-term
considerations
and remedialactions can be
discussed but
are not
integrated in
the plan

Transition plan
scope,
consistency,
analysis

No clear scopeto the plan, no
consistency
among sections
and no analysis
presented

Transition
timescale

Climate change
adaptation

The company has
been carrying out adiagnosis of climatechange impacts, andidentified related
physical risks.
It has set up
indicators for
decision making andimpact thresholds

Contains details ofactions thecompany
realistically expects
to implement (andthese actions are
relevant andrealistic)

Considerationof potential
short-term“shocks” orstressors(suddenadversechanges) has
been madeTransition
covers entire
business and isspecific to it,with proper
scoping,
consistency
and proper
analysis

16%

15%

Covers the short,medium and longterm. From now
until at least 20
years

Covers theshort, medium
and long term.
From now andbeyond (2050)

8%

The company has
been carrying out adiagnosis of climatechange impacts,
and identified
related physicalrisks.

The company
conducts aroutinestrategy, fromdiagnosis toaction andassessment,
including
updating
knowledge andlearning
processes.
It checks thatthe adaptation
actions do notharm, or evenhave a positive
impact on
climate change
mitigation,

10%

It has set up
indicators for
decision making
and impact
thresholds.
It has planned
actions to reduce
its physical risk,taking also into
account otherenvironmental

Generic methodology | ACT Initiative | Version 1 | page 79

-Assessment of
its adaptive
capacity (HR,technical,
financial,organizational)

issues (impact on
climate change
mitigation,
biodiversity, healthand pollution

biodiversity,
health andpollution.

It has defined
updating knowledge
and learning
processes

RATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

GE 5.3 LOW-CARBON TRANSIT ION PLAN

All the sectors will require substantial changes to their business to align to a low-carbon economy, over the short, medium and long term,
whether it is voluntarily following a strategy to do so or is forced to change by regulations and structural changes to the market. It is betterfor the success of its business and of its transition that these changes occur in a planned and controlled manner.



GE 5.4 CLIMATE CHANGE MANAGEMENT INCENTIVES (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 5.4 CLIMATE CHANGE MA NAGEMENT INCENT IVES

The Board’s compensation committee has included metrics for the reduction of GHG emissions in the annual and/or long-term compensationplans of senior executives; the company provides monetary incentives for the management of climate change issues as defined by a seriesof relevant indicators.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:Management incentivesThe reporter shall report whether the company provides incentives for the management of climate change issues, including theattainment of targets



The reporter shall provide details on the incentives provided for the management of climate change issues

Generic methodology | ACT Initiative | Version 1 | page 80

H OW T HE A NA LY SISWILL B E D O NE

The reporter shall provide details on the activities that are usually rewarded by incentives in the company-

The analyst verifies if the company has compensation incentives set for senior executive compensation and/or bonuses, that directly and routin

reward specific, measurable reductions of tons of carbon emitted by the company in the preceding year and/or the future attainment of emissi
reduction targets, or other metrics related to the company’s low-carbon transition plan.

Question

Subdimension

Associated score

Who
entitled
benefit?

istoWhat is thetypeofincentives(nonmonetary/monetary)?

What are thetargets
related to CC
incentives? *RATIONALE

Basic

Advanced

25%

50%

0%

Who is entitledto benefit?

Any
other
answerType
incentives

Nonmonetary

Incentivized
performanceindicator

Standardof

No targets
incentivized

Nextpractice

Executive

Low-carbon aligned

Weight75%

100%

Seniorexecutive

Board
chairman
Board/Executive board Director on board Corporate
executive
team - Chief Executive
Officer (CEO) - Chief
Operating Officer (COO) Chief Financial Officer(CFO) - All employees

33%

Recognition(nonmonetary)

Other non-monetary
rewardMonetary reward

33%

Behaviourchange related
indicatororotherspecification

Efficiency project,
Efficiency
target,Environmental
criteria included inpurchases, Supply
chain engagement,orotherspecification

Emissions
reduction
project,
Emissions
reduction target, Energy
reduction
project,
Energy reduction target,
or other specification

33%

GE 5.4 CLIMATE CHANGE MA NAGEMENT INCENT IVES

Generic methodology | ACT Initiative | Version 1 | page 81

R A TIO NA LE OF T HE

Executive compensation should be aligned with overall business strategy and priorities. As well as commitments to action the company

IND IC A T OR

should ensure that incentives, especially at the executive level, are in place to reward progress towards low-carbon transition. This will
improve the likelihood of successful low-carbon transition.
Monetary incentives at the executive level are an indication of commitment to successful implementation of a strategy for low-carbon
transition.

Generic methodology | ACT Initiative | Version 1 | page 82GE 5.5 CLIMATE CHANGE SCENARIO TESTING (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 5.5 CLIMATE CHANGE SCENARIO TESTING

Testing or analysis relevant to determining the impact of transition to a low-carbon economy on the current and projected business model
and/or business strategy has been completed, with the results reported to the board or c-suite, the business strategy revised where
necessary, and the results publicly reported.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

The reporter shall provide the details and supporting documents on the organization’s climate change scenario testing

H OW T HE A NA LY SIS

The analyst evaluates the description and evidence of the low-carbon economy scenario testing for the presence of best-practice elements and consis

WILL B E D O NE

with the other reported management indicators.

The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points is allocate
elements indicating a higher level of maturity.
Maximum points are awarded if all of these elements are demonstrated.

Question

Subdimension

Associated score

Basic

Standard

Advanced

Next practiceLow-carbon'aligned

0%

25%

50%

75%

100%

WeightWhat is the scopeof the scenario
testing?

BoundaryLargeelement notincludedLargeelement
includedSmallelement notincludedSmallelement
included

Covers entire
boundary of thecompany

35%

What is the time
horizon of the
scenario testing?

Timescale

From
present
futureFrom present
to 2020

From
present
2025

From present to2035

From present
to 2050

20%

to

to

Generic methodology | ACT Initiative | Version 1 | page 83

Are the results inqualitative/
quantitative/
financial terms?

Results

Expressed
inqualitative
terms

Expressed inqualitative
terms

Expressed
in financial
terms

Expressedinfinancial terms
and results aretranslated
intovalue-at-riskExpressed asvalue-at-risk

10%

What are the types
ofchanging
conditions
considered?

Conditions
considered

Considersnoparticularchanging
conditions

Considers anarrow rangeofdifferentchangesinconditions.

Considers arange
ofchanging
conditions
together(multivariate)Considerschanging climate
conditionsincombination withchangesinoperatingconditions

Considerschanging
conditions
specific for a 2degree
decarbonizatio
n scenario

35%

RATIONALE

GE 5.5 CLIMATE CHANGE SCENARIO TESTINGR A TIO NA LE OF T HE

There are a variety of ways of analysing the potential impacts of climate-related changes on the business, whether these are slow and

IND IC A T OR

gradual developments or one-off “shocks”. Investors are increasingly calling for techniques such as use of an internal price on carbon,
scenario analysis and stress testing to be implemented to enable companies to calculate the value-at-risk that such changes could pose to
the business. As this practice is emergent at this time there is currently no comprehensive survey or guidance on specific techniques or tools
recommended for the sector. The ACT methodology thus provides a broad definition of types of testing and analysis which can be relevantto this information requirement, to identify both current and best practices and consider them in the analysis.

Scenario stress testing is an important management tool for preparing for low-carbon transition. For businesses likely to be strongly affectedby climate change impacts (both direct and indirect), it has even greater importance.

Generic methodology | ACT Initiative | Version 1 | page 84

SUPPLIER ENGAGEMENT (WEIGHTING: 0 – 20%)


GE 6.1 STRATEGY TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 6.1 S UPPLIER ENGA GEME NT

The company has a strategy, ideally governed by policy and integrated into business decision making, to influence, enable, or otherwise

OF IN D IC A T OR

shift suppliers’ choices and behaviour in order to reduce GHG emissions.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦

Methods of supplier engagement, strategy to prioritizing supplier engagements and measures of success♦

Number of suppliers engaged and proportion of total spend♦

Data on suppliers’ GHG emissions and climate change strategies

H OW T HE A NA LY SIS

The assessment will assign a maturity score based on the company’s formalized strategy with their suppliers, expressed in a maturity matrix.

WILL B E D O NE

A company that is placed in the ‘aligned’ category will receive the maximum score. Companies who are at lower levels will receive a partial
score, with 0 points awarded for having no engagement at all.
This maturity matrix is indicative but does not show all possible options that can result in a particular score. Companies responses will be
scrutinized by the analyst and then placed on the level in the matrix where the analyst deems it most appropriate.

Generic methodology | ACT Initiative | Version 1 | page 85

Question

Subdimension

Associated scoreTo
what
extent GHG
emissions
reductionissuesareintegrated inengagementwithsuppliers?

What action
leversareused by thecompany toencourage
suppliers todevelop lowcarbon offer?

What is thescope of theaction levers
used?

0%

Consideration of
reduction targets

Use oflevers

Scope

Basic

actionNo
considerationNoactionlevers usedNo
strategy
applied to any
suppliers

Standard

Advanced

Nextpractice

Low-carbonaligned

25%

50%

75%

100%

CSR
clauseincludedinengagementswith suppliers.
Meanscommitment
includedincontracts

CSR
clausewith
GHG
emissions
reduction
includedinengagements
withsuppliers.
Resultsdriven
commitment
in contracts

CSR clausewithquantified
GHG
emissions
reduction
included inengagementswithsuppliers.
Results
commitment
in contracts.
Regularreporting

CSR clause with
GHG
emissions
reduction included
aspriorityinengagements with
suppliers. Resultsdriven
commitmentincontracts. Regular
reporting.

Passiveapproach(suppliers may
offer
lowcarbon
product/service
but no specificrequirements
fromthecompany)

Use of one
action lever(awarenesscampaign,
compensation, purchasing
rule, etc.)

Useofseveralactionlevers(awarenesscampaign,
compensati
on,purchasing
rule, etc.)

Use of several
actionlevers(awarenesscampaign,
compensation,purchasing
rule,etc.).
Regularauditsofthesupplier by thepurchaser or arepresentative

Strategy
applied to few
large suppliers

Strategy
applied
to
most
large
suppliers

Strategy
applied to alllarge
suppliers
and
few
small
suppliers

Strategy applied toall of suppliers

Weight

20%

30%

20%

Generic methodology | ACT Initiative | Version 1 | page 86

To
what
extent carbon
issuesareintegrated in
the selection
processof
suppliers?

Suppliers
selection
process

No selection of
suppliers
basedon
environmental
criteria
No change insuppliers’ base

Selectionofsuppliers basedon at least one
environmental
criterion
No change insuppliers’ base

No change insuppliers’
base
Selection of
suppliers with
low-carbon
alternatives

RATIONALE

GE 6.1 STRATEGY T O INFLUENCE SUPPLIERS TO REDUC E THEIR GHG EMISSIONSR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Supplier engagement is included in the ACT Generic assessment for the following reasons:♦

No changein suppliers’
base
Selection of
suppliers
offering lowcarbon
alternatives

Engaging
suppliers over lowcarbon alternatives
30%

It might have a significant impact in terms of GHG emission, achieving decarbonization of the whole supply chain is also key to reachthe ambitious goals in most of the companies♦

Engaging suppliers through contract clauses and sales incentives is necessary to take them on board.

SC OR I N G T H E I NDICAT O R :Because of data availability and complexity, a direct measure of the outcome of such engagement is not very feasible at this time. It is often
challenging to quantify the emissions reduction potential and outcome of collaborative activities with the supply chain. Therefore, theapproach of a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards
a single score for Supplier Engagement.

Generic methodology | ACT Initiative | Version 1 | page 87GE 6.2 ACTIVITIES TO INFLUENCE SUPPLIERS TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

GE 6.2 ACTIVIT IES TO INFLUENCE SUP PLIERS TO RED UCE THEIR GHG EMISSI ONSThe company participates in activities that help, influence or otherwise enable suppliers to reduce their GHG emissions. The indicator aims to
be a holistic measure of these activities to assess how active the company is in reducing the emissions of their products/services in the value
chain across all products/services.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:♦List of initiatives implemented to influence suppliers to reduce their GHG emissions, green purchase policy or track record, suppliercode of conduct

H OW T HE A NA LY SIS

The assessment will assign a maturity score based on the company’s formalized strategy with their suppliers, expressed in a maturity matrix.

WILL B E D O NE

A company that is placed in the ‘aligned’ category will receive the maximum score. Companies who are at lower levels will receive a partial score, with 0 p

This maturity matrix is indicative but does not show all possible options that can result in a particular score. Companies responses will be scrutinized by thethe analyst deems it most appropriate.

Question

Subdimension

Associated score

How
the
company
encourage
suppliers
to reduce
their GHG
emissions?

Suppliers GHG
emissions

Next practiceLow-carbon'alignedBasicStandard

Advanced

0%

25%

50%

75%

100%

No activity

Companyrequiressuppliers tosign a code of
conduct(orsimilar) and/or
toprovidedata
regardingtheirCompany
assists
suppliers
toreducetheir
GHGemissionsCompany partners
with large suppliers
to define common
GHGemissions
reduction plan

Company
contributes in GHG
emissions
reduction along its
value
chain
throughclose
partnerships with
suppliers

Weight50%

Generic methodology | ACT Initiative | Version 1 | page 88

environmental
performance(forauditedsuppliers).
Means-driven
commitment

No greenpurchaseDoes
thecompany
develop a
low-carbon
demand?

Low-carbon
offer
suppliers

No
greenpurchaseofCompany
purchases lowcarbon
products/equip
ment/services

Company purchases
low-carbon
products/equipment/
services
Company partners
with suppliers todevelop low-carbon
products/services

RATIONALE

GE 6. 2 ACTIVIT IES TO INFLUE NCE SUPP LIER S TO REDUCE THEIR GHG EMISSIONSR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Activities to influence suppliers are included in the ACT Generic assessment for the following reasons:♦Company
purchases
lowcarbon
products/equipme
nt/ services
Company partners
with suppliers todeveloplowcarbon
products/services

50%

It might have a significant impact in terms of GHG emission, achieving decarbonization of the whole supply chain is also key to reachthe ambitious goals in most of the companies♦

Engaging suppliers through contract clauses and sales incentives is necessary to take them on board.

SC OR I N G T H E I NDICAT O R :Because of data availability and complexity, a direct measure of the outcome of such engagement is not very feasible at this time. It is often
challenging to quantify the emission reduction potential and outcome of collaborative activities with the supply chain. Therefore, the approachof a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards a single
score for all the activities related to Supplier Engagement.

Generic methodology | ACT Initiative | Version 1 | page 89

CLIENT ENGAGEMENT (WEIGHTING: 0-20%)


GE 7.1 STRATEGY TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)

DESCRIPTION &REQUIRE MENTS

SH OR T
D ESC R IPTI O N

GE 7.1 STRATEGY T O INFLUENCE CUST OMERS T O REDUCE THEIR GHG EMISSION

The company has a strategy, ideally governed by policy and integrated into business decision making, to influence, enable, or otherwise shift
customer choices and behaviour in order to reduce GHG emissions.

OF IN D IC A T OR

D A TAThe relevant data for this indicator are:

R EQ UIR E ME NTSStrategy to influence clients GHG emissions% of products/services



Data on customers’ choices and preferences towards reducing GHG emissions

H OW T HE A NA LY SISWILL B E D O NE

Question

Subdimension

Associated score
To what extent
GHG
emissions
reductionissuesareintegrated
in
engagementwith clients?

Considerati
on ofreduction
targets

Next practiceLow-carbonalignedBasicStandard

Advanced

0%

25%

50%

75%

100%

No strategy

GHG
emissions
reduction
included inengagementwith clients
Means-driven
commitment

Quantified GHG
emissions
reduction
included inengagement withclients

Quantified GHG
emissions
reduction included
in engagementwith clients

Quantified GHG
emissions reduction
included as priority
in engagements withclients

Weight40%

Generic methodology | ACT Initiative | Version 1 | page 90

What
actionlevers are usedbythecompany
toencourage
clients to buy
low-carbon
products/
services?

Influenceon clients

No strategy

Passiveapproach

No strategy
What is thescope of theactionlevers
used?

Scope

Use of one action
lever (awarenesscampaign,
compensation,purchasing rule,etc.)
Provision of
documents andtools by thelessorUse of several
action levers(awarenesscampaign,
compensation,purchasing rule,etc.)
Provision of
documents andtools

Use of several
action levers(awarenesscampaign,
compensation,purchasing rule,etc.)
Contribution to shiftdemand towards
low-carbon
products/services

Only large clients(represent 20%of revenues intotal)

Majority of clients(represent morethan 60% of total
revenues)

All clients (represent
more than 90% of
total revenues)

RATIONALE

GE 7.1 STRATEGY T O INFLUENCE CUST OMER BEHAVIOUR TO REDUCE THEIR GHG E MISSIONSR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Strategies to influence customers are included in the ACT Generic assessment for the following reasons:
♦
♦

40%

20%

1. Companies usually have the ability to influence the strategy and performance of clients regarding climate thanks to their products
or services.
2. The downstream can represent the largest source of emissions for some companies throughout the value chain and clients should
be engaged through a proper ambitious strategy.

SC OR I N G T H E I NDICAT O R :Because of data availability and complexity, a direct measure of the outcome of such engagement is not very feasible at this time. It is often
challenging to quantify the emission reduction potential and outcome of collaborative activities with the supply chain. Therefore, the approachof a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards a single
score for a strategy related to Client Engagement.

Generic methodology | ACT Initiative | Version 1 | page 91

GE 7.2 ACTIVITIES TO INFLUENCE CUSTOMER BEHAVIOUR TO REDUCE THEIR GHG EMISSIONS (WEIGHTING: 0-10%)
DESCRIPTION &REQUIRE MENTS

GE 7.2 ACTIVIT IES TO INFLUENCE CUST OMERS T O REDUCE THEIR GHG EMISSION

SH OR T D ESC R IPT IO N

The company participates in activities, to influence, enable, or otherwise shift customer choices and behaviour in order to reduce GHG

OF IN D IC A T OR

emissions.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

H OW T HE A NA LY SISWILL B E D O NE♦

Activities to influence clients GHG emissions♦% of products/services♦

Data on customers’ choices and preferences towards reducing GHG emissions

QuestionSub
Dimension

Associated score

How doesthecompany
encourage
clients to
reducetheir GHG
emissions?

Does
the
company
promotelow-carbon
solutionstoitsclients?

Standard

Advanced

0%

25%

50%

75%

100%

No
engagement

Company
promotes
products/services
with lower carbon
footprint but nodata reported
Company defines
means-driven
commitment

Company
assists clientsto reduce their
GHG emissions

Company
partners
withlarge clients todefine common
GHG emissions
reduction plan
Provisionof
documents andtools
Multi-party
workinggroup
withannualmeeting at least

Company
contributesinGHGemissions
reduction along
its value chain
throughclose
partnerships withclients

The company
does offer lowcarbon/energy
efficientproducts/services
but no promotion
strategydeveloped

The company
promotes its
low-carbon
offer throughmarketing andcommunication
channels

The company
promotes its lowcarbon offer
throughmarketing andcommunication
channels. The
company offers
buying incentives
regarding low-

The company
promotes its lowcarbon offer
throughmarketing andcommunication
channels. The
company offers
buying incentives
regarding low-

Clients GHG
emissionsLow-carbon
products/
services

No offer

Next practiceLow-carbonalignedBasic

Weight50%

50%

Generic methodology | ACT Initiative | Version 1 | page 92

carbonproducts/services

RATIONALE

GE 7.2 ACTIVIT IES TO INFLUENCE CUST OMERS T O REDUCE THEIR GHG EMISSIONR A TIO NA LE OF T HE

R ELEV A NC E OF T HE I ND ICA T OR:

IND IC A T OR

Activities to influence customers are included in the ACT Generic assessment for the following reasons:♦♦carbonproducts/services. The brandidentity of thecompany is based
only on its rangeof low-carbon
solutions.

1. Companies usually have the ability to influence the strategy and performance of clients regarding climate thanks to their products
or services.
2. The downstream can represent the largest source of emissions for some companies throughout the value chain and clients should
be engaged through low-carbon solutions.

SC OR I N G T H E I NDICAT O R :Because of data availability and complexity, a direct measure of the outcome of such engagement is not very feasible at this time. It is often
challenging to quantify the emission reduction potential and outcome of collaborative activities with the supply chain. Therefore, the approachof a maturity matrix allows the analyst to consider multiple dimensions of supplier engagement and assess them together towards a single
score for all the activities related to Client Engagement.

Generic methodology | ACT Initiative | Version 1 | page 93

POLICY ENGAGEMENT (WEIGHTING: 5%)GE 8.1 COMPANY POLICY ON ENGAGEMENT WITH TRADE ASSOCIATIONS (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 8.1 COMPANY POLIC Y ON E NGAGE MENT W ITH TRADE ASSOCIATIONS

The company has a policy on what action to take when industry organisations to which it belongs are found to be opposing “climate-friendly”

OF IN D IC A T OR

policies.

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

Public climate change policy positionsDescription of this policy (scope & boundaries, responsibilities, process to monitor and review)

Trade associations that are likely to take a position on climate change legislation

H OW T HE A NA LY SISWILL B E D O NE

Question

Subdimension

Associated score
What is thescopecoveredby
theengagement
policy? Is thepolicypublicly
available?

Transparency and
scope

Basic

Standard

Advanced

Nextpractice

Low-carbonaligned

0%

25%

50%

75%

100%

Does not covertheentirecompany or allgroup
memberships.
Is not publicly
available.

Does not covertheentirecompany or allgroup
memberships.
Ispublicly
available.

Covers the entire
company and its
activities, and allgroup
memberships andassociations, but
notpublicly
available

Covers the entire
company and its
activities, and allgroup
memberships andassociations.
Public policy is
publicly available

Weig
ht

40%

Generic methodology | ACT Initiative | Version 1 | page 94

Does
the
company
have a review
processoftradeassociations?

Does
the
company
have
anactionplan
regardingengagement
with
trade
associations?

Oversight

Action plan

No process toreview
trade
associations
positions

No mention ofthis element

A process tomonitorandreview
trade
association
positionsexists but is
not necessarily
implementedA
processtomonitorandreview
trade
association
positionsexistsandiswell
implemented

A process tomonitor andreview tradeassociation
positionsexists and iswell
implemented
at a high levelof
theorganization

A
processtomonitorandreview
trade
associations
positions exists.
Responsibility foroversight of thepolicy lies at top
level
of
the
organization

40%

Sets out
what
action is to betaken in the caseof inconsistencies

Optiontoterminate
membershipoftheassociation

Option of publicly
opposingor
activelycountering
theassociation
position

20%

RATIONALE

GE 8.1 COMPANY POLIC Y ON E NGAGE MENT W ITH TRADE ASSOCIATIONSR A TIO NA LE OF T HE

Trade associations are a key instrument by which companies can indirectly influence policy on climate. Thus, when trade associations take

IND IC A T OR

positions, which are negative for climate, companies need to take action to ensure that this negative influence is countered or minimized.
This indicator is consistent with the ACT philosophy, ACT framework and ACT guidelines and common to the other sectoral methodologies.

Generic methodology | ACT Initiative | Version 1 | page 95

GE 8.2 TRADE ASSOCIATIONS SUPPORTED DO NOT HAVE CLIMATE-NEGATIVE ACTIVITIES OR POSITIONS (WEIGHTING: 2%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

GE 8.2 TRADE ASSOCIA TIONS S UPPORTED DO N OT HAVE CLIMATE- NEGATIVE ACTIVITIES OR P OSIT IONSThe company is not on the board or providing funding beyond membership of any trade associations that have climate-negative activities orpositions.

The relevant data for this indicator are:

H OW T HE A NA LY SISWILL B E D O NE

Company policy on engagement with trade associations Details on the climate polices supported by the company.

Question
Associated score

Does the company
support tradeassociations thathave climate
negative
activities/positions?

BasicStandard
0%Company is on the board
or provides funding
beyond membership totrade associations thathave climate-negative
activities or positions.

25%

Advanced50%

Nextpractice

Low-carbonaligned75%

100%

The company is not on
the board or providing
funding beyond
membership of any tradeassociations that haveclimate-negative
activities or positions.
Company can bemember.

Company is
not a memberof any tradeassociations
that haveclimatenegative
activities orpositions

Weight100%

The list of trade associations declared in the CDP data and other external source entries relating to the company (e.g. RepRisk database),is assessed against a list of associations that have climate-negative activities or positions. The results are compared to any policy describedin 5.1.

RATIONALE

GE 8.2 TRADE ASSOCIA TIONS S UPPORTED DO N OT HAVE CLIMATE- NEGATIVE ACTIVITIES OR P OSIT IONS

Generic methodology | ACT Initiative | Version 1 | page 96

R A TIO NA LE OF T HE
IND IC A T OR

Trade associations are a key instrument by which companies can indirectly influence policy on climate. Thus, participating in tradeassociations which actively lobby against climate-positive legislation is a negative indicator and likely to obstruct low-carbon transition.
However, membership in associations that support climate positive policies should also be considered in the analysis.

GE 8.3 POSITION ON SIGNIFICANT CLIMATE POLICIES (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 8.3 P OSIT ION ON SIGNIFIC ANT CLIMATE POLICIE S

The company is not opposed to any significant climate relevant policy and/or supports climate friendly policies.

OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

The questions comprising the information request that are relevant to this indicator are:

The company should attach supporting documentation, if this exists, giving evidence on the position of the company on significant climate
policies (public statements, etc.).



The company shall disclose details of the issues on which it has been directly engaging with policy makers and its proposed legislative
solution.

External sources of data shall also be used for the analysis of this indicator (e.g. RepRisk database, press news, actions in standard
development)
H OW T HE A NA LY SIS

The analyst evaluates the description and evidence on company position on relevant climate policies for the presence of best practice

WILL B E D O NE

elements, negative indicators and consistency with the other reported management indicators. The company description and evidence will
be compared to the maturity matrix developed to guide the scoring and a greater number of points will be allocated for elements indicatinga higher level of maturity.
The company publicises direct opposition to climate policy (e.g. direct statement issues or given by a company representative in a speech
or interview)
List of cross-sectoral initiatives on the low-carbon transition of the economy:- Paris Agreement- SBT Initiative (validated targets)
Generic methodology | ACT Initiative | Version 1 | page 97

-…

Question

BasicStandard

Advanced

Next practiceLow-carbon aligned
WeightAssociatedscore

What is the
positionofthe company
on significant
climatepolicies?

RATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

0%

Reported direct
opposition toclimate policy
can be found(third-party
claimsarefound)

25%

No reported
directopposition toclimate policy

50%

75%

Publicly
supports
significant
climatepolicies

Publicly commits tointernational lowcarbon commitments
Engages in
sectoral/crosssectoral initiatives
against climatechange*100%
Publicly commits tointernational low-carbon
commitments
Leads sectoral/cross-sectoral
initiatives against climatechange* (founding
member/mainsponsor/spokesperson of theinitiative)100%

GE 8.3 P OSIT ION ON SIGNIFICANT CLIMATE POLICIE S

Many initiatives have been developed about sustainable practices that contribute to the transition to a low-carbon economy. Companies
should not oppose effective and well-designed regulation in these areas, but should support it. Assessing the position of the company
regarding the evolution of the context is thus key to understand the corporate vision in these matters

GE 8.4 COLLABORATION WITH LOCAL PUBLIC AUTHORITIES (WEIGHTING: 1%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 8.4 COLLABORATION WITH LOCAL PUBLIC A UTHOR IT IES

The company is not opposed to any significant climate-relevant policy.

OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

The questions comprising the information request that are relevant to this indicator are:Generic methodology | ACT Initiative | Version 1 | page 98



The company should attach supporting documentation, if this exists, giving evidence on the position of the company on significant climate
policies (public statements, etc.).



The company shall disclose details of the issues on which it has been directly engaging with policy makers and its proposed legislative
solution.

External sources of data shall also be used for the analysis of this indicator (e.g. RepRisk database, press news, actions in standard
development)
H OW T HE A NA LY SIS

The analyst evaluates the description and evidence on the company’s position on relevant climate policies for the presence of best-practice

WILL B E D O NE

elements, negative indicators and consistency with the other reported management indicators. The company description and evidence arecompared to the maturity matrix developed to guide the scoring and a greater number of points are allocated for elements indicating a higher
level of maturity

Question
Associated
score

Does
the
company
partner andsupport local
authorities interritory
emissions
reduction?

RATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

BasicStandard
0%

No evidence that thecompany iscollaborating withlocal authorities on
emissions reductions
other than respecting
its contractual
engagement, if anyorThird-party claims
are found showingthat the company is
not complying withlocal climate policies

Advanced

25%

Next practiceLow-carbon aligned

50%

75%

100%

The company isproactiveonemissions
reduction of theterritory
throughestablisheddialogue withlocal
publicauthorities todesign futureclimate policies
enforcement

The
company
dialogues
with
local
publicauthorities
todesignfutureclimatepolicies
enforcement, andparticipates in pilot
programs to test or
developsuch
policies on the
territory

The company implements
on a large-scale climate
policypreviously
designed in collaboration
with local authorities andtestedthroughpilot
programs on the territory.
The company also shows
willingness to replicate
such initiatives in otherareas.

Weight100%

GE 8.4 COLLABORATION WITH LOCAL PUBLIC AUTHOR IT IES

Collaboration with public authorities can be a key instrument by which companies can indirectly influence policy on climate. Thus, participating
actively in local dialogues shows leadership in climate actions and can significantly help climate policies enforcement.

Generic methodology | ACT Initiative | Version 1 | page 99

BUSINESS MODEL (WEIGHTING: 10-15%)
A company may transition its business model to other areas to remain profitable in a low-carbon economy. The company’s future business model should enable it to decouple
financial results from GHG emissions, in order to meet the constraints of a low-carbon transition while continuing to generate value. This can be done by developing activities
outside the core business of the company.
This module aims to identify both relevant current business activities and those still at a burgeoning stage. It is recognised that transition to a low-carbon economy, with theassociated change in business models, will take place over a number of years. The analysis will thus seek to identify and reward projects at an early stage as well as moremature business activities, although the latter (i.e. substantially sized, profitable, and/or expanding) business activities will be better rewarded.
♦

Focus will be on new business models♦

High emissive / involved in high emissive activity companies should be benchmarked by quantitative modules (not in business model module)♦

Score will be based on long-term viability of the company’s business model in the low-carbon economy♦

Is the company developing levers, and actioning them, to transition to LCE?

♦

Is there a need to change the fundamental business model? e.g. ticket agencies can just do train not air travel, engineering services no longer provided to fossil fuelcompanies.

♦

How linked to emissive activities is the business model?

♦

New business models vs. transitioning existing business model♦

We shouldn’t penalise companies who can’t shift a business model because they are already low-carbon

Specific guidelines regarding multi-activity company will be available in ACT framework soon.

GE 9.1 PROGRESS TOWARDS A FULLY DECARBONIZED BUSINESS (WEIGHTING: 3,3-7,5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 9.1 PROGRESS TOWA RDS A FULLY DECARBONIZED B USINE SS

The company has identified the level of decarbonization required for its activity.

OF IN D IC A T OR

Generic methodology | ACT Initiative | Version 1 | page 100

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

% of company activities that need to be decarbonized

Measurement of the total size of relevant company activity or product or services portfolio; financial metric (revenue, sales, profit)
OR activity metric (volume of product sold, number of product units sold, number of SKUs offered, number of specialists employed)Measurement of the proportion of low-carbon products or services offered as a percentage for the total amount of products andserviced offered (as per units chosen above)Evidence that the company offers some products or services defined as low-carbon



Evidence that the company has plans to phase out or exit high carbon products or services with phase out dates, in a publicannouncement or transition plan.

Evidence that the company only offers products or services which meet the definition of “low-carbon” and are delivered in a lowcarbon aligned way

H OW T HE A NA LY SISWILL B E D O NE

In order to align with a low-carbon future, it is expected that companies identify the level of decarbonization required for the products andservices they offer, and show evidence they are changing their product/service mix as necessary to survive in a low-carbon economy.
The analyst evaluates the description and evidence of the company’s current offer of low-carbon products and services as a proportion of its
entire scope of activity, and evidence of its plan to that remain to be decarbonized in the coming years.
The company description and evidence are compared to the maturity matrix developed to guide the scoring and a greater number of points
are allocated for elements indicating a higher level of maturity.
The maturity matrix is provided below:

Generic methodology | ACT Initiative | Version 1 | page 101

Question
Associatedscore

Identificationof the level ofdecarbonizati
on required

RATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

BasicNext practiceLow-carbonalignedStandard

Advanced

0%

25%

50%

75%

100%

All company
activities
covered by theassessment needto decarbonize –the company
offers no lowcarbon products
or services. The
company has noor little
awareness of theneed totransition tooffering lowcarbon products/
servicesAllcompany
activities coveredby the assessment
needtodecarbonize – thecompany offers no
low-carbon
products
orservices.
The
company has no or
little awareness of
the
need
to
transition
tooffering
lowcarbon products/
services

40 – 75% of the

75 - 95% of the
product portfolio
is defined lowcarbon products
or services andthe company has
a public timeline
to
align
its
product portfolio
as 100% lowcarbon.

Note: All (>95%) thecompany
product
portfolioisconsidered
lowcarbon
products/services(as per an agreed
definition of lowcarbon products orservices)

product portfolio isdefined low-carbon
products

orservices and thecompanyhasapublic timeline toalign its productWeight100%

portfolio as 100%
low-carbon.

GE 9.1 PROGRESS TOWA RDS A FULLY DECARBONIZED B USINE SS

This indicator aims to reward the progress of companies that have already started to decarbonize their activity over the years, or have alreadysuccessfully transitioned towards offering only low-carbon products or services. ACT is willing to capture the dynamic of the company in its
transition towards a low-carbon economy and this indicator shows both efforts that have been made by the company and progress that stillneeds to be achieved. The transition towards offering only low-carbon products and services produced in a decarbonized way has two
aspects: 1) Awareness 2) Action. A company must first become aware of the need to eventually transition to only low-carbon products, before
it starts taking action to decarbonize its portfolio of products and services. Some companies may only offer products or services which meetthe definition of a low-carbon product or service.

Generic methodology | ACT Initiative | Version 1 | page 102

The changing product portfolio should be included in and consistent with the company’s low-carbon transition plan.

GE 9.2 INTEGRATION OF THE LOW-CARBON ECONOMY IN CURRENT AND FUTURE BUSINESS MODELS (WEIGHTING: 3.3-7,5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N
OF IN D IC A T OR

D A TA R E Q UIR E ME NTS

GE 9.2 INTEGRAT ION OF THE LOW-CARBON ECO NOMY IN CURRENT AND FUTURE BUS INESS MODE LS

The company is actively developing business models for a low-carbon future by demonstrating its application of low-carbon business model
pathways.

The questions comprising the information request that are relevant to this indicator are:

H OW T HE A NA LY SIS

Details on business model(s) shifting to reducing emissions through better production practices.

Best practice elements to be identified in the test/analysis include:

WILL B E D O NE♦

the business activity is profitable;♦

the business activity is of a substantial size;♦

the company is planning to expand the business activity;♦

expansion will occur on a defined timescale

The maturity matrix is provided below:

Generic methodology | ACT Initiative | Version 1 | page 103

Question

Basic

Advanced

Low-carbon aligned

Associated score

0%

50%

100%

No

low-carbon

Company has identifiedofbusiness model identified

need to decarbonize andNew low-carbon businesslow-carbon(new company projects all

is investigating a newmodel was identified and iscorrespondbusiness model throughbeing implemented

Identification
9.1

new

business model

new

to

existing

activities)

Profitabilityofbusiness model

early stage of development(research orconception

stage)

Mature business model
but non- profitable or in adevelopment

stage(prototype/

Size of businessmodel

for the company (few FTE
Non- estimatedor time dedicated, small
turnover, few revenues
expected, etc.)

9.4

Growthpotentialof business modelNon-estimatedschedule
business modelor

exploration of the businessmodel interrupted

Deployment
9.5

and

profitablebusiness model

20%

Non- scheduled

Substantial size of market
for

the

company(significant number or FTE
or dedicated hours, great

20%

turnover, great anticipatedprofitability, etc.)

Schedulingnextdevelopment steps

Deployment
ofMaturedemonstration or test)
Limited size of business

9.3

20%

scenario analysis

Non- estimated or in a very
9.2

WeightScheduling the expansionof the target or size of the20%

business modelscheduled

Deployment

scheduledwith a 2 years horizon orwith a 2 years horizon or

less

more

20%

Maximum points are awarded if all of these elements are demonstrated.

Generic methodology | ACT Initiative | Version 1 | page 104

RATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

GE 9.2 INTEGRAT ION OF THE LOW-CARBON ECO NOMY IN CURRENT AND FUTURE BUS INESS MODE LS

In addition to developing sustainable practices, a company may transition its business model to other areas to remain profitable in a lowcarbon economy. The company’s future business model should enable it to decouple financial results from GHG emissions, in order to meetthe constraints of low-carbon transition while continuing to generate value.
This indicator aims to identify both relevant current business activities, and those still at a burgeoning stage. It is recognized that transition
to a low-carbon economy, with associated change in business models, will take place over a number of years. The assessment will thus
seek to identify and reward projects at an early stage as well as more mature business activities, although the latter (i.e. substantially sized,
profitable, and/or expanding) business activities will be better rewarded.

GE 9.3 SHARE OF LOW-CARBON CLIENTS (WEIGHTING: 0-5%)

DESCRIPTION &REQUIRE MENTS

SH OR T D ESC R IPT IO N

GE 9.3 S HARE OF LOW-CARBON CLIE NTS

A measure of the company contribution to decarbonize the value chain through the share of its low-carbon clients

OF IN D IC A T OR

PR ER E QU ISITE

This indicator is only applicable for a company operating upstream of an emissive activity where there is an existing trajectory, producing apart of the final product (e.g. transport equipment manufacturer)

D A TA R E Q UIR E ME NTS

The relevant data for this indicator are:

The company’s share of product/service used by final low-carbon products / activity

H OW T HE A NA LY SIS

The analyst will evaluate the share of the company’s client mix dedicated to low-carbon clients.

WILL B E D O NE

Low-carbon products / services are defined according to the EU Green taxonomy. Please refer to the section “Appendix” in order to have more
information

Generic methodology | ACT Initiative | Version 1 | page 105

The company description and evidence will be compared to the maturity matrix developed to guide the scoring and a greater number ofpoints will be allocated for elements indicating a higher level of maturity.
Low-carbon use mix:

Question
Associated score

Basic
0%

What is the shareof

low-carbon

clientRATIONALE

R A TIO NA LE OF T HE
IND IC A T OR

Standard

Below 20%

25%

Between 20%
and 40%

Advanced
50%

Next practice75%

Low-carbonalignedWeight100%

Between 40%
and 60%Between 60% and 80%

Above 80%

100%

GE 9.3 S HARE OF LOW-CARBON CLIE NT

ACT Generic also aims to engage all the companies operating in the value chain of sectors specifically covered by another ACT methodology.
This indicator is for companies operating in an emissive value chain, upstream of an intensive activity, supplying part of the final product(e.g., transport equipment manufacturer). A company that supplies part of a highly emitting final product bears some responsibility for theemissions linked to this product, but is also at risk in a low carbon world. This indicator aims to capture the evolution of a company's customer
mix towards low-carbon customers. For example, a company that produces equipment for the automotive sector can increase its share of
products for electric vehicles, thus contributing to the promotion of low-carbon vehicles and reducing its risk linked to thermal vehicles in a
low-carbon world.

Generic methodology | ACT Initiative | Version 1 | page 106

6. Assessment
6.1. SECTOR BENCHMARKCONNECTION WITH OTHER ACT METHODOLOGIES
Some sectors covered by ACT Generic operate in a value chain where there is an existing / upcoming ACT sectoral methodology. For example:-

Infrastructures and road construction activities are based on cement procurement (ACT Cement)-

Plane manufacturers are upstream the transport operators (ACT Transport)

In order to use the most relevant pathways for each company, ACT Generic is using existing low-carbon benchmarks identified in these other ACT methodologies.
-

For direct emissions, most of the material emissions have a link with another existing methodologies:-

For significant indirect emissions [5], two distinctive cases are considered:page 107[6] Please, for more information, refer to the section “Sector Benchmark” where the links between existing and upcoming methodologies with ACT Generic are presented.

In the case where the company operates in a value chain where there is an existing ACT/SBT methodology, two practical situations result in quantitative analyses with existing
ACT/SBT low-carbon trajectories:-

The company purchases emissive products whose climate performance is subject to existing sectoral trajectories. The analyst will rate the alignment of theperformance of these purchased products with sectoral pathways, for instance cement.
Existing and future sectoral pathways that can be applied are the following:

page 108

-The company produces ready-to-use products whose climate performance is subject to existing sectoral trajectories. The analyst will rate the alignment of theperformance of the company’s products with sectoral pathways, for instance transport.
Existing and future sectoral pathways that can be applied are the following:

All existing and to be developed ACT methodologies that will be used for ACT Generic are detailed in appendix.
GENERAL BENCHMARK APPROACH
The fundamental target to achieve for all organizations is to contribute to not exceeding a threshold of 2⁰ global warming compared to pre-industrial temperatures. This target
has long been widely accepted as a credible threshold for achieving a reasonable likelihood of avoiding climate instability, while a 1.5⁰C rise has been agreed upon as an
aspirational target.
A sector benchmark for the Generic approach of ACT is a complex task, as the methodology covers heterogeneous sectors and companies that produce GHG emissions invery different ways.
page 109

In ACT sectoral methodologies, the benchmarks used rely on a unique intensity metric based on a physical unit. For instance, in the cement sector, tonnes of CO2 per tonneof cement produced in the activity metric is used. This approach is not possible for ACT Generic. There are some reasons for this:♦An activity indicator may be relevant for a company but not for another. Indeed, the ACT Generic methodology covers companies operating very different activities: frommining companies to electrical equipment manufacturers, through pharmaceutical companies.

♦

On a company-scale, no single activity indicator can capture the majority of emissions. For instance, tonnes of CO 2e per unit of floor space can capture emissions
performance and trend of the buildings owned by a company, but does not provide any information about the emissions intensity for transport activities or industrial
processes.

The large differences in business models among the companies to be assessed under the ACT Generic methodology, the diversity of the products or services they offer andthe fact that their most material sources of emissions are different from one another pose significant challenges for developing standardised benchmarks for the methodology.
Therefore, the benchmark approach for the Generic methodology implements a combination of strategies to address those challenges, including:♦♦use of a range of different benchmarks;
flexibility in applying them to ensure that they are relevant to the company being assessed:owhere relevant, the methodology uses benchmarks in emissions intensity that were built during the development of previous ACT sectoral methodologies;▪

For the assessment of direct emissions, the methodology mainly relies on benchmarks developed in ACT Real Estate and ACT Transport;▪

For the assessment of indirect emissions, the methodology identifies the links between the value chain where the company operates and sectors
covered by a sectoral approach of ACT. If a company is upstream or downstream to a sector covered by a specific ACT methodology, the Genericmethodology will assess this company’s performance thanks to the relevant benchmarks developed in other ACT methodologies.

owhere there is no existing benchmark, the benchmark used is an absolute contraction approach, as developed by SBTi (see figure below)

page 110

Figure: Scenarios in 1.5°C. The minimum annual linear reduction rates aligned with 1.5˚C is 4.2% (solid black line). (Source: SBTi)♦

developing benchmarks in terms of potential actions and activities in addition to GHG emissions measurement.

To deal with the heterogeneity of sectors and activities covered in the Generic approach of the ACT methodology, the company’s GHG emissions to be benchmarked havebeen split in three categories:a.

Direct emissions caused by the company activities (Scope 1 + 2)b.

Indirect emissions caused by upstream activities (Scope 3)c.

Indirect emissions caused by downstream activities (Scope 3)
page 111

Those three dimensions may represent a small or a large part of the emissions of an assessed company, depending on its activities. The wide range of specific cases justify
to tailor the benchmarks used to the company being assessed.
The details regarding the scopes of GHG emissions are included in the Scope & Boundaries part.
Except for some of the first ACT sectoral methodologies developed, all the benchmarks used by the ACT initiative are aligned at minimum with the ambition of the Beyond-2Degree Scenario11 (B2DS).
BENCHMARKING COMPANY DIRECT EMISSIONS TARGETS AND PERFORMANCEIn the Generic approach of ACT, benchmarks have been taken from different sources. Where it was relevant, the methodology uses benchmarks that were built during thedevelopment of previous sectoral methodologies (ACT Real Estate, ACT Auto, ACT Transport, ACT Retail). Otherwise, the Generic methodology relies on SDA methodologies(service buildings, power generation). When no sectoral benchmark is available or usable, the benchmark used is an absolute contraction approach, developed by SBTi.

11 In the IEA ETP 2017, the more ambitious Beyond-2-Degree scenario (B2DS) was proposed in order to limit the rise of global temperature by 1.75 degrees by 2100.

page 112

Mapping of benchmarks used of sources of direct emissions



BUILDINGS

The sectoral benchmarks for building emissions are, where
possible, taken from the ACT Real Estate methodology, thatmainly relies on IEA ETP 2DS scenario (Option A). Otherwise,
they are taken from the SDA methodology “Services
Buildings” applied to the IEA ETP 2DS scenario. (Option B)
The figure below synthesizes the distinction between the two
options.

page 113

Figure: Synthesis of the buildings’ GHG emissions assessment in ACT GenericThe option A enables a more accurate assessment of the emissions of buildings owned by a company. However, it requires a high level of detail in the data provided by thecompany (almost as much details as in the ACT Real Estate methodology). Therefore, this option will be used only for companies meeting specific requirements. For othercompanies, the option B, which requires less detailed data, would be more appropriate.

Option A●

Geographical Coverage

The geographical coverage of buildings is detailed in the ACT Real Estate methodology.
●

Reference pathway

For owned or rented buildings falling into the scope of ACT Real Estate methodology, a reference pathway defines the carbon intensity (kgCO2/m²) pathway from a given
geographical area and/or country, as well as by building type. The reference pathway considers all the energy consumption from all the relevant end-uses (space heating,space cooling, lightning, water heating, appliances and miscellaneous and cooking).
The reference pathway classification is defined considering the three input data parameters:❏ Building type: Office, Hotel, Retail, Residential;
page 114

❏ Geographical area: group of countries or relevant country in terms of CO2 emissions;❏ Country level: country pathway (e.g. for EU-28) or State pathway for relevant countries (e.g. for USA, but it is not developed in the first version of ACT
Real Estate).
The Generic reference pathway designation is composed as follows:
Pathway_name =” Building type””_”Geographical zone”_”Country”
Example:Name of the pathway for offices owned by a company in Germany = Office_Europe_Germany●

Available Reference Pathways

To date, 154 reference pathways are available:●

Geographical areas: Europe, USA, China, India, Brazil, Russia, ASEAN and South Africa●

Countries: E.U. 28 countries (as they are in 2018)●

Building types: Office, Retail and Hotel (Reference pathways for the different building types are only available at country level)

Since this part of the Generic approach of ACT is based on ACT methodology for Real Estate, it has to include the points of attention raised during the development of theformer. As the ACT methodology for Real-Estate is meant to be used in any part of the world, the assessment report shall mention when data is unavailable for an area andwhich “proxy” has been used, with justification, according to the following table:
Description of the area with missing datacompared to another documented area

Proxypage 115

Country level data not available

1.
If this zone is relatively similar (in terms of
GDP/capita, type of energy and industry infrastructure, mainfeatures of the building stock…) to another one already
documented, consider the same data,
2.
If this zone is relatively similar to another one, butdiffers by climatic conditions, use the same data where
applying specific climatic coefficients to in-use energy
consumption,
3.
If this zone is included in a larger zone that is alreadycharacterized, then consider the data of the larger zone,

Option B●

Geographical Coverage

The reference pathway is given at global level only.
●

Reference pathway

For other type of buildings, a default reference carbon intensity (kgCO2/m²) pathway is used. The figure below shows this default benchmark. In this chart, the ‘activity index’
represents the global growth of area in floor space in commercial buildings (excluding residential buildings). The ‘Scope 1 emissions index’ represents how the absoluteemissions of the entire sector are poised to develop according to this benchmark. For retailers, this means that between the reporting year and 2050, total absolute emissions
from their buildings need to be reduced by about 23%. ‘Scope 1 carbon intensity’ is calculated by dividing absolute emissions by the activity index. This means that the intensity
in emissions (expressed in gCO2e per square meter) needs to be reduced by ~ 55% according to the benchmark.

page 116●

Available Reference Pathways

The option B relies on SDA Service Buildings pathway.

Option A and Option B●

Company Benchmark

The company benchmark is a custom benchmark based in the 2°C scenario from the IEA, and its assets. A company benchmark is built following three steps.
❏ The company must calculate the different reference pathways for each building type and geographical area within its portfolio (option A)❏ The company must calculate the floor area of its buildings falling into the option B. A default pathway is associated with it.
page 117❏ Then, the company benchmark is built as a weighted (buildings’ floor area) sum of one or a combination of several reference pathways, considering current
values.
Example: A company has an office building in Germany (Option A) and an “Education” building (Option B) with respectively 1000 m² and 2000 m² of floor area.
To determine the company benchmark one reference pathways is needed: Office_Europe_Germany. The other pathway is given by default (SDA Service buildings)
Company benchmark =𝐹𝑙𝑜𝑜𝑟−𝑎𝑟𝑒𝑎−𝑜𝑓𝑓𝑖𝑐𝑒−𝐺𝑒𝑟𝑚𝑎𝑛𝑦
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 𝑓𝑙𝑜𝑜𝑟 𝑎𝑟𝑒𝑎

𝐹𝑙𝑜𝑜𝑟−𝑎𝑟𝑒𝑎−𝑂𝑡ℎ𝑒𝑟 𝐵𝑢𝑖𝑙𝑑𝑖𝑛𝑔

× 𝑂𝑓𝑓𝑖𝑐𝑒_𝐸𝑢𝑟𝑜𝑝𝑒_𝐺𝑒𝑟𝑚𝑎𝑛𝑦 + 𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 𝑓𝑙𝑜𝑜𝑟 𝑎𝑟𝑒𝑎 × 𝐷𝑒𝑓𝑎𝑢𝑙𝑡 𝑆𝐷𝐴 𝐵𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘

TRANSPORTThe sectoral benchmarks for transport emissions are taken from the ACT Auto, for Light Duty passenger vehicles and ACT Transport methodologies, for other vehicles. To
date both methodologies mainly rely on IEA ETP 2DS scenarios, but ACT Transport methodologies are currently updated to change to IEA ETP B2DS.
The figure below synthesizes this approach:Figure: Synthesis of the transports’ GHG emissions assessment in ACT Generic (past emissions)Light Duty passenger vehicles
page 118

●Geographical Coverage

As the ACT Generic methodology relies on ACT Auto regarding light duty passenger vehicles, the sectoral low-carbon benchmark pathway is divided into several pathways
corresponding to the following regions/countries:
●

USA

●

EU-27

●

China

●

Japan

●

Brazil●Canada●South Korea●

Mexico●Australia

●

India

●

Russia

●

Other

●

Available Reference Pathways

The assessment of “light duty vehicles” relies on pathways developed in ACT Auto methodology. More details about those pathways could be found in this specific methodology.

Other vehicles●

Geographical Coverage

As the ACT Generic methodology relies on ACT Transport regarding other vehicles, the sectoral low-carbon benchmark pathway is divided into several pathways corresponding
to the following regions/countries:●

OECD countries●

Non-OECD countries●

European Union●

United States●

Mexicopage 119●Brazil●Russia

●

China

●

India

●

ASEAN

●

South Africa

If no breakdown in geographical repartition of the transportation activities is available, there is a benchmark at world level.
●

Available Reference Pathways

The assessment of “other vehicles” relies on pathways developed in ACT Transport methodology. More details about those pathways could be found in this specific methodology.

All vehicles●

Company Benchmark

The company benchmark is built following the following steps.
●

The company must calculate the different reference pathways for each different geographical area for vehicles falling into option A (light duty passenger vehicles)●

The company must calculate the different reference pathways for each different geographical area for vehicles falling into option B (other vehicles)●

Then, the company benchmark is built as a weighted sum of one or a combination of several reference pathways, considering current values. The different pathways
are computed according to the associated company’s GHG emissions.



INDUSTRY ENERGY CONSUMPTION

The benchmark for industry energy consumption emissions is based on the absolute-contraction approach of the Science-Based Targets initiative. This method requires allcompanies to reduce their emissions by the same percentage of absolute emissions reductions as required for a given scenario. This benchmark relies on the IPCC Special
Report on Global Warming of 1.5° (SR15) [4] for a 1.5C trajectory. This equates to at least 4.2% absolute reduction per year. As an exception, the analyst is allowed to choose
the well below 2° reference, with a 2.5% absolute reduction per year, if it is duly justified.
The benchmark relies on absolute emissions. Economic intensity metric presents strong biases and was therefore not chosen. The company is allowed to opt for its own
intensity metric based on a physical unit, only if the methodology is considered robust enough by the analyst.
● INDUSTRY DIRECT PROCESS

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The benchmarks for industry direct process emissions are based on the best available scenarios. Where possible, the industry direct processed are benchmarked specificscenarios. As of this stage of methodological development, only one specific scenario has been identified: cold production (refrigerant leakage).
●

Cold production (refrigerant leakage)

The HFC (hydrofluorocarbons) and related gases globally leak from refrigerators and other cold equipment and have high global warming potentials (GWP) of up to 2000. Thisis a problem for a few specific sectors. Therefore, the Generic approach of ACT would like to incentivise companies, where relevant, to take actions on this matter by instatinga separate, ambitious benchmark that reduces refrigerant leakage drastically in the short term.
No identified pathway is available from the IEA ETP 2DS via the SDA approach. The default sectoral benchmark for refrigerant leakage is therefore taken from the Reduced
GWP Refrigerant Scenario for 15 European Union countries (RGR EU15 scenario) [7] until 2030 and linearly extended to zero GHG emissions from leakage in 2050.
●

Other industry direct process

The benchmark for other industry direct process emissions is based on the absolute-contraction approach of the Science-Based Targets initiative. This method requires allcompanies to reduce their emissions by the same percentage of absolute emissions reductions as required for a given scenario. This benchmark relies on the IPCC Special
Report on Global Warming of 1.5°C (SR15) for a 1.5°C trajectory. This equates to at least 4.2% absolute reduction per year. As an exception, the analyst is allowed to choose
the well below 2° reference, with a 2.5% absolute reduction per year, if it is duly justified.
The benchmark relies on absolute emissions. Economic intensity metric presents strong biases and was therefore not chosen. The company is allowed to opt for its own
intensity metric based on a physical unit, only if the methodology is considered robust enough by the analyst.



RENEWABLE ENERGY

The benchmark for renewable energy is based on SDA Power Generation. The targets set by companies regarding their share of renewable energy will be assessed according
to it. Therefore, this benchmark applies to power generation only and not for electricity consumption.
BENCHMARKING COMPANY UPSTREAM INDIRECT EMISSIONS TARGETS AND PERFORMANCE
Given the heterogeneity of the sectors covered by the ACT Generic methodology, two distinct types of benchmarks are necessary to assess the upstream indirect emissions
targets (GE 1.2) and performance (GE 4.2): ETP Scenario or SBT Absolute contraction.
The choice of the benchmark depends on the scenario availability. The selection will be made according to the following process:-If a specific pathway based on carbon intensity from an ETP scenario is available for products and materials purchased, and if the emissions related to these purchases
represent a high source of emissions for the company upstream scope, a target in carbon intensity will be asked and analysed (E.g. cement, steel...). Concretely, if acompany is downstream on the value chain of a sector covered by a specific ACT methodology and sells products that have already been benchmarked, those products’
performance will be assessed according to this benchmark.
page 121

E.g.: A company buys cement to build road and other infrastructures. The company will be assessed on the carbon intensity of this cement. If the company
asks its supplier for the carbon intensity of the cement, this data will be compared to the ACT Cement benchmark. Otherwise, average carbon intensity of thesector will be used.
-

Otherwise, a default pathway in absolute contraction is used as the benchmark. The pathway relies on absolute emissions. Economic intensity metric presents strong
biases and was therefore not chosen. The company is allowed to opt for its own intensity metric based on a physical unit, only if the methodology is considered robust
enough by the analyst.

BENCHMARKING COMPANY DOWNSTREAM INDIRECT EMISSIONS TARGETS AND PERFORMANCE
Given the heterogeneity of the sectors covered by the ACT Generic methodology, two distinct types of benchmarks are necessary to assess the downstream indirect emissions
targets (GE 1.3) and performance (GE 4.2): ETP Scenario or SBT Absolute contraction.
The choice of the benchmark depends on the scenario availability. The selection will be made according to the following process:●A benchmark in carbon intensity is applied If the company meets the following requirements:○

The use of sold products represent a high source of downstream emissions;○

The company produced ready-to-use products and is able to measure their carbon intensity;○

A specific pathway based on carbon intensity from an ETP scenario is available;
E.g.: A plane manufacturer knows the carbon intensity of the products (planes) it sells. The company will be evaluated on the carbon intensity of its planes,

thanks to the benchmark developed in ACT Transport.
●

Otherwise, a default pathway in absolute contraction is used as the benchmark. The pathway relies on absolute emissions. Economic intensity metric presents strong
biases and was therefore not chosen. The company is allowed to opt for its own intensity metric based on a physical unit, only if the methodology is considered robust
enough by the analyst.

page 122

6.2. ALLOCATION METHOD AND SPECIFIC CASES
Some of ACT main quantitative indicator use the Sectoral Decarbonisation Approach method, developed by the SBT initiative, as an allocation method to compute company’s
specific low carbon pathway from sectoral pathways. The use of this approach implies that some specific case may happens during the computation of the low-carbon pathway,
the main case reported to date is when a company is already below the level of emissions required at final year of the sectoral pathway, resulting in an increasing low-carbon
pathway that cannot be used such as in trend indicators.

In this specific situation, where emissions intensity at year of reporting are inferior to emissions intensity of benchmark at final year, the attributed score is 100 %.

page 1236.3. OTHER QUANTITATIVE BENCHMARKS USED FOR INDICATORSBenchmark for the CAPEX Low-carbon & mitigation technologies
Low-carbon & mitigation technologies are the ones meeting the mitigation criteria of the EU Green Taxonomy. The list of eligible products will be detailed in an appendix andis set to be updated with the further development of this taxonomy. A list of technologies related to energy is also available in the ACT Oil & Gas sector.
Benchmark for the R&D in Low-carbon & mitigation technologies
A taxonomy has been established by the OECD (OECD Environment Working Papers No. 89 (2015)) in order to quantify the patents in environment-related technologies. It
can be used to measure environmental innovation, if restricted to climate change mitigation technologies. It is based on the seven following categories:Environmental management

Water-related adaptation technologies



Biodiversity protection & ecosystem health

Climate change mitigation related to energyCCS of GHG

Climate change mitigation related to transportation

Climate change mitigation related to building

The categories of this taxonomy used for ACT Generic are the ones related to climate change mitigation (climate change mitigation related to energy, transportation andbuilding) and CCS of GHG.
Benchmark for the Company patenting activity in low-carbon & mitigation technologies
The European Patent Office (EPO) and the US Patent and Trademark Office (USPTO) have developed a dedicated patent classification scheme (Cooperative PatentClassification - CPC) which details patents for climate change mitigation or technologies:
Y02B – CCMTs related to buildings
Y02C – Capture, storage, sequestration or disposal of greenhouse gases
Y02E – Reduction of greenhouse gas emissions, related to energy generation, transmission or distribution
Y02P – CCMTs relating to production in energy intensive industries
Y02T – CCMTs related to transportation
Y02W – CCMTs related to wastewater treatment or waste management(EPO, 2017)
This classification is used for ACT Generic.

page 124

6.4. WEIGHTINGS
As substantial emissions occur all along the value chain depending on the company, ACT Generic needs to capture each company’s carbon material challenges. Unlike otherframeworks, the ACT Generic methodology does not define explicitly boundaries, but propose a weighting matrix to define a weighting that is tailored to each company. The
flexibility of this method enables the analyst to keep the initial objective of ACT initiative by assessing companies with sectoral specificities. This matrix allows to determine thecompany’s profile, based on three criteria:

The company’s main sources of GHG emissions



The company’s levers

If the company is in a high-emission value chain

page 125TABLE: Weighting scheme matrix
Not relevant
1

2

3

4

x

Low

x

Mediumx

High

Targets

Material
investment

Intangible
investment

Sold productperformance

The company has very low climate
challenges related to directemissions

Direct emissions emissions
represent low climate issues for thecompany

The company emissions related todirect emissions represent less than
10% of total emissions and less than
10,000 teqCO2
The company has very few levers to
reduce emissions related to material
investment

Emissions related to direct emissions
represent less than 25% of total
emissions (or less than 10% but morethan 10,000 teqCO2)
The company has some levers to
reduce emissions related to material
investment

Direct emissions represent
significant climate issues for thecompany

The most important climate
challenges of the company are
related to direct emissions

Direct emissions represent less than
50% of total emissions

Direct emissions represent more than
50% of total emissions

The company has sensitive levers to
reduce emissions related to material
investment

The company has strong levers to
reduce emissions related to material
investment

The company does not operate in asector in which the R&D levers areimportant for the transition

The company operates in a sector inwhich the R&D levers are important
for the transition

The company has very low climate
challenges related to indirectemissionsIndirect emissions represent low
climate issues

Indirect emissions represent
significant climate issues

The most important climate
challenges of the company are
related to indirect emissions

Emissions related to indirect emissions
represent less than 10% of total
emissions and less than 10,000 teqCO2

Emissions related to indirect emissions
represent less than 25% of total
emissions (or less than 10% but morethan 10,000 teqCO2)

Emissions related to indirect emissions
represent less than 50% of total
emissions

Emissions related to indirect emissions
represent more than 50% of total
emissions

The company has very few levers to
reduce its indirect emissions

The company has some levers to
reduce its indirect emissions

The company has sensitive levers to
reduce its indirect emissionsx

Potential
range

Moduleweight15%15%0%-35%

0%-5%

0%-35%

The company has strong levers to
reduce its indirect emissions
The company operates in an intensive
value chain

5

6

Management

Suppliers

7

Clients

10%
The company has very low climate
challenges located upstream

Upstream emissions represent low
climate issues

Upstream emissions represent
significant climate issues

The most important climate
challenges are located upstream

The emissions related to suppliers
represent less than 10% of total
emissionsand less than 10,000 teqCO2

The emissions related to suppliers
represent less than 25% of total
emissions (or less than 10% but morethan 10,000 teqCO2)

The emissions related to suppliers
represent less than 50% of total
emissions

The emissions related to suppliers
represent more than 50% of total
emissions

The company has very few levers to
reduce its upstream emissions

The company has some levers to
reduce its upstream emissions

The company has sensitive levers to
reduce its upstream emissions

The company has strong levers to
reduce its upstream emissions

The company has very low climate
challenges located downstream

Downstream emissions represent
low climate issues

Downstream emissions represent
significant climate issues

The most important climate
challenges are located downstream

The emissions related to clients
represent less than 10% of total
emissions and less than 10,000 teqCO2

The emissions related to clients
represent less than 25% of total
emissions (or less than 10% but morethan 10,000 teqCO2)

The emissions related to clients
represent less than 50% of total
emissions

The emissions related to clients
represent more than 50% of total
emissions

The company has very few levers to
reduce its downstream emissions

The company has some levers to
reduce its downstream emissions

The company has sensitive levers to
reduce its downstream emissions

The company has strong levers to
reduce its downstream emissions

10%

0%-20%

0%-20%

10%

8

Policyengagement

5%

5%

9

Business model

10%-15%

Evaluation steps:When starting the evaluation, the evaluator enters the GHG profile of the company if it is available. With these data, the materiality line of each module will be
automatically filled in the weighting scheme matrix. If the company does not have a GHG profile or if the evaluator estimates that it is not robust enough, the evaluator

page 126

will manually fill the materiality line of each module. Even if the materiality line is automatically filled, the evaluator will be free to modify it. The materiality line aims atevaluate the company on its most materials sources of emissions.


The evaluator needs then to fill the levers line of each module. This criterion aims at adjusting the weight of the modules depending on the levers the company has inorder to reduce its GHG emissions at each level.

An additional information is asked for module 4: “does the company operates in a GHG emissions intensive value chain?”. If the answer is yes, the weight of themodule is increased. The objective of this category is to capture the risks related the client mix of the company, being in a high-emissive value chain.

The weight of each module (noted Mi) is then subdivided between the different indicators that make it up, according to their own rules.
TABLE: Performance indicator weightings
GEN

ModuleIndicator

ModuleweightIndicator
weight1.1

Alignment of direct emissions reduction targets

Share directemissions *
12%

1.2

Alignment of upstream indirect emissions reduction targets

Share
upstream
emissions *
12%

1.3

Alignment of downstream indirect emissions reduction targets

Sharedownstream
emissions *
12%

1.4

Time horizon of targets

2%

1.5

Achievement of past and present targets

1%

2.1

Trend in past emissions intensity from material investments

1/12*M2*(1L) +1/8*M2*L

Targets

M1

Material

M2

Investment

2.2

Trend in future emissions intensity from material investments

1/4*M2*(1-L)+ 3/8*M2*Lpage 127

2.3

Share of low-carbon CAPEX

2.4

Locked-in emissions

3.1

R&D in low-carbon technologies

1/3*M2*(1-L)+ 1/2*M2*L

1/3*M2*LIntangible

0%-2.5%
M3

Investment

3.2

Company low-carbon patenting activity

0%-2.5%

4.1

Product/service-specific interventions

M4*1/4 orM4*1/3

4.2

Product-specific performanceM4*1/4 orM4*1/3

Sold Product

M4

Performance

4.3

Share of low-carbon products/services

M4*1/4 orM4*1/34.4

Sub-contracted transport service performanceM4*1/4 or0%

5.1

Oversight of climate change issues

3%

5.2

Climate change oversight capability

3%Management

M5

5.3

Low-carbon transition plan

2%

5.4

Climate change management incentives

1%

page 128

5.5

Climate change scenario testing

1%

6.1

Strategy to influence suppliers to reduce their GHG emissions

1/2*M6

Supplier

M6

6.2

Activities to influence suppliers to reduce their GHG emissions

1/2*M6

7.1

Strategy to influence customer behaviour to reduce their GHG emissions

1/2*M7

ClientM7

7.2

Activities to influence customer behaviour to reduce their GHG emissions

1/2*M7

8.1

Company policy on engagement with trade associations

1%

Trade associations supported do not have climate-negative activities or positions2%

8.2
PolicyM8

engagement

8.3

Position on significant climate policies

1%

8.4

Collaboration with local public authorities

1%

9.1

Identification of the level of decarbonization required

1/3*M9 or
1/2*M99.2

9.3

Business
model

Integration of the low-carbon economy in current and futures business models

Share of low-carbon clients

M9

1/3*M9 or
1/2*M9

1/3*M9 or
0%

page 129

Overall

100%

100%

L is the share of total direct emissions covered by sources categories that can be assessed using the locked-in indicator, see indicator 2.4 Locked-in Emissions for more
information.
For module 1, the total of emissions to compute share only take into account scope (upstream/direct/downstream) for which materiality is superior to 10% or 10,000 tCO2eq.
For modules 2, 4 and 9, the presence of several possible weightings is explained by the fact that one indicator per module can be non-activated (indicator 2.4 for module 2,
indicator 4.4 for module 4 and indicator 9.3 for module 9), thus impacting the weighting of the other indicators within the modules.
The quantitatively scored modules (Targets, Material Investments, Intangible investment, Sold product performance) carry 50% to 55% of the final weight, and the qualitatively
scored modules (Management, Client engagement, Supplier Engagement, Policy engagement, Business model) carry 45% to 50%. The indicators within the modules also
carry their own weighting.



RATIONALE FOR WEIGHTINGS

The selection of weights for both the modules and the individual indicators was guided by a set of principles (see the ACT framework document for more information). These
principles helped define the weighting scheme of the modules and indicators.
Principle

Explanation

Value of information

The value of the information that an indicator gives about
a company’s outlook for the low-carbon transition is theprimary principle for the selection of the weights.

Impact of variation

A high impact of variation in an indicator means that not
performing in such an indicator has a large impact on the
success of a low-carbon transition, and this makes it
more relevant for the assessment.
page 130

Future orientation

Indicators that measure the future, or a proxy for the
future, are more relevant for the ACT assessment thanpast & present indicators, which serve only to inform
about the likelihood and credibility of the transition.

Data quality sensitivity

Indicators that are highly sensitive to expected data
quality variations are not recommended for a high weightcompared to other indicators, unless there is no otherway to measure a particular dimension of the transition.

The weightings have been designed for each type of company covered by the ACT Generic methodology in order to reflect the strategic stakes which are different from acompany to another.
Targets
15%
The Targets module has a relatively large weight of 15%. Most of it (12%) is shared between three indicators: alignment of direct emissions, alignment of indirect upstream
emissions and alignment of indirect downstream emissions. Those 12% are allocated on a pro-rata basis according to the emissions breakdown between direct emissions,indirect upstream emissions and indirect downstream missions.
A weight of is attributed to the previous achievement indicator, which measures the company’s past credentials on target setting and achievement. It is not very important by
the principles outlined above, but nonetheless can provide contextual information on the company’s experience to meet ambitious targets Finally, the time horizon of targets
has a weight of 2%. It is a proxy of how forward-looking the company is, which is very long-term oriented.
Material Investment
0-35%
The Material Investment module has a variable weight that ranges from 0% to 35%. The weight is allocated on a pro rata basis to modules 2 (Material Investment) and 4 (Sold
Product Performance) determined by the weighting scheme matrix.
The global evaluation is therefore mostly future-oriented, what justifies a higher weight for the sub-indicator “Trend in future emissions intensity” than for the sub-indicator“Trend in past emissions intensity”. The four indicators within this module trend in past emissions intensity, trend in future emissions intensity, share of low-carbon CAPEX andlocked-in emissions will be weighted as follows, given M2 the weight of the module:
Indicator

WeightGE 2.1 Trend in past emissions intensity

8,25%*M2 or 12,5%*M2

GE 2.2 Trend in future emissions
intensity

24,75%*M2 or 37,5%*M2

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GE 2.3 Share of low-carbon CAPEX

33% or 50%*M2

GE 2.4 Locked-in emissions

0% or 33%*M2

Intangible Investment
0% or 5%The R&D investments in climate change mitigation technologies indicator is focused on the company’s intangible investments or financial costs into climate change mitigation
technologies. For companies operating in value chains with high stakes regarding low-carbon transition, R&D investments towards low-carbon technologies are crucial. For
those companies, the module is given a weight of 5%.
For companies within the scope of the ACT Generic methodology that are not operating in a carbon intensive value chain, this indicator is not relevant and is therefore weighted
0%. In that case, the remaining 5% are allocated to module 9 (Business Model).
The general information given by the company will determine whether this module is relevant for it.
Nota Bene: For companies operating in sectors that are not very technology-dependent, module 3 is weighted 0%. The 5% normally allocated to it are allocated to module 9.
The companies that cannot rely on R&D to decarbonize their activities are expected to develop new business models compatible to a low-carbon economy.
Sold product performance
0-35%
The Sold product performance module has a variable weight that ranges from 0% to 35%. The weight is allocated on a pro rata basis to modules 2 (Material Investment) and4 (sold product performance), determined by the weighting scheme matrix.
The indicators within this module will have a variable weight, since the sources of GHG emissions may be significantly different from a company to another in this Genericmethodology of ACT. Therefore, the weight of each indicator will be determined by the weighting scheme matrix (GE 4.1 and GE 4.2) and specific questions (GE 4.2 and GE
4.4). This will enable the assessment of the most material sources of emissions for each company.
Given M4 the weight of the module:

Indicator

WeightGE 4.1 Product/service-specific interventions

M4*25% or M4*33%
or M4*50%

GE 4.2 Product/service-specific performance

0% or M4*25% orM4*33%

GE 4.3 Share of low-carbon products/services

M4*25% or M4*33%
or M4*50%

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4.4 Sub-contracted transport service performance

0% or M4*25% orM4*33%

page 133

Management
10%
Management is a multi-faceted module that makes up 10% of the score, because it incorporates many different smaller indicators that together paint a picture of the company’s
management and strategic approach to the low-carbon transition. The majority of this weight is placed on the oversight of climate change issues and the climate change
oversight capability, which are weighted 3% each. These two indicators measure the ability of the company to integrate sustainability to its strategy and to embrace the main
challenges related to low-carbon transition. Besides, according to the principle of future orientation, the transition plan provides more information on how this company will
specifically deal with the transition, and has a weight of 2%.
The remaining indicators (climate change management incentives and climate change scenario testing) have a low weight of 1%, as they are contextual indicators whose
outcome can either strengthen or undermine the company’s ability to carry out the transition plan and meet ambitious science-based targets.
Supplier engagement
0% to 20%
In order to decarbonize the whole economy, it is essential that all stakeholders get involved.
Depending on their significant indirect emissions breakdown (upstream emissions VS downstream emissions) and levers, companies will have to focus on either their supplier’s
engagement or their client’s engagement towards decarbonization. The modules “Supplier engagement” and “Client engagement” are therefore weighted on a pro-rata basis,
determined by the weighting scheme matrix.
The two indicators within the “Supplier engagement” module (Strategy to influence suppliers to reduce their GHG emissions and Activities to influence suppliers to reduce their
GHG emissions) are equally weighted.
Client engagement
0% to 20%
In order to decarbonize the whole economy, it is essential that all stakeholders get involved.
Depending on their significant indirect emissions breakdown (upstream emissions VS downstream emissions), companies will have to focus on either their supplier’s
engagement or their client’s engagement towards decarbonization. The modules “Supplier engagement” and “Client engagement” are therefore weighted on a pro-rata basis,
determined by the weighting scheme matrix.
The two indicators within the “Supplier engagement” module (Strategy to influence suppliers to reduce their GHG emissions and Activities to influence suppliers to reduce their
GHG emissions) are equally weighted.
Policy engagement
5%
In line with the rationale for the management indicators of low weight, the policy engagement indicators are also contextual aspects which tell a narrative about the company’s
stance on climate change and how the company expresses it in their engagement with policy makers and trade associations. The total weight for this module is therefore
medium at 5%. The company policy on engagement with trade associations, the company’s position on relevant climate policy and the company’s collaboration with local publicauthorities make up the bulk of this, with 1% each. Finally, 2% is allocated to positions of the company’s trade associations that do not have climate-negative activities.
Business model
10-15%The module captures many elements and aspects that cannot otherwise be captured in any of the other modules. It includes those aspects that are relevant to the transition
but are not directly a part of the primary activities. It is future oriented by asking the companies on its narrative on certain future directions it can/has to take is standard toenable the transition.
Nota Bene: For companies operating in sectors that are not very technology-dependent, module 3 is weighted 0%. The 5% normally allocated to it are allocated to module 9.
The companies that cannot rely on R&D to decarbonize their activities are expected to develop new business models compatible to a low-carbon economy.

page 1346.5. DATA REQUEST
Table 6 introduces the list of information which will be requested to companies through a questionnaire, as
well as the corresponding indicators.

ModuleIndicators
1.1
1.2
1.3

1 - Targets

1.4

1.5

2.1

2 - Material
investment

2.2
2.3
2.4

3.1
3 - Intangible
investment
3.2
4.1
4 - Sold Product
Performance

5- Management

4.2
4.3
4.4
5.1
5.2
5.3
5.4

Data request
Reduction targets in carbon intensity, carbon intensity at reporting year,
and other information if necessary (geography, …)
Reduction targets in absolute contraction
Reduction targets in absolute contraction for each GHG emissions item
or in carbon intensity% of Upstream emissions covered by the targets
Reduction targets in absolute contraction for each GHG emissions item
or in carbon intensity% of Downstream emissions covered by the targets
A comparison of: (a) the longest time horizon of the company’s targets,and (b) the long-term point fixed by ACT assessment methodology.
The company has interval targets that ensure both short and long-termtargets are in place to incentivize short-term action and communicate
long-term commitments.
Base year
Reporting year
Target year
Percentage of reduction target from base year in absolute emissions
Percentage of reduction target achieved in absolute emissions
Percentage of reduction target from base year in emissions intensity
Percentage of reduction target achieved in absolute emissions intensity
Carbon intensity at reporting year, Y-5 and other information if
necessary (geography, …)
Total emissions at reporting year and Y-5.
Carbon intensity at reporting year and Y+5, other information if
necessary (geography, …)
Total emissions at reporting year and Y+5.
Average share of low-carbon CAPEX (out of total CAPEX) for the next
3 years
Building portfolio: average carbon intensity of building owned, in thepast 5 years and renovation planned.
Transport fleet information (annual activity, emissions from present
and lanned assets, number of units per year …)
R&D costs/investments in climate change mitigation technologies of thecompany.
Total R&D costs/investments of the company.
Patenting activity in climate change mitigation technologies of thecompany over the last 5 years.
Total patenting activity of the company over the last 5 years
Intervention on products/service reporting tool
Carbon intensity of the purchased products/service (if relevant) at Y-5
and Y+5:
Share of turnover generated by low-carbon products (out of total
turnover) at Y-5, Y and Y+5
Information on subcontractors (projected emissions, activity, time
horizon investments, low-carbon vehicles actions for emissions
reduction)
Environmental policy and details regarding governance
Environmental policy and details regarding governance
Environmental policy and details regarding governanceManagement incentives
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5.5

6 - Suppliers
engagement

6.1

6.2

7.1
7 - Client
engagement
7.2

8.1
8- Policy
engagement

8.2
8.3
8.4
9.1

9 - Business
Model

9.2

9.3

Scenario testing
Methods of supplier engagement, strategy to prioritizing supplierengagements and measures of success
Number of suppliers engaged and proportion of total spend
Data on suppliers’ GHG emissions and climate change strategies
List of initiatives implemented to influence suppliers to reduce their
GHG emissions, green purchase policy or track record, supplier codeof conduct
Strategy to influence clients GHG emissions% of products/services
Data on customers’ choices and preferences towards reducing GHG
emissions
Strategy to influence clients GHG emissions% of products/services
Data on customers’ choices and preferences towards reducing GHG
emissionsPublic climate change policy positions
Description of this policy (scope & boundaries, responsibilities, process
to monitor and review)
Trade associations that are likely to take a position on climate change
legislation
Company policy on engagement with trade associations
Position of the company on significant climate policies (publicstatements, etc.).
Public climate change policy positions
Description of this policy (scope & boundaries, responsibilities, process
to monitor and review)% of company activities that need to be decarbonize
New low-carbon business model
Profitability of business model
Size of business model
Growth potential of business model
Deployment schedule of business model
The company’s share of product/service use by final low carbon
products / activity.

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7. Rating
The ACT rating shall comprise: A performance score
 A narrative score
 A trend score
These pieces of information shall be represented within the ACT rating as follows:a.

Performance score as a number from 1 (lowest) to 20 (highest)

b. Narrative score as a letter from E (lowest) to A (highest)c.

Trend score as either “+” for improving, “-” for worsening, or “=” for stable.

In some situations, trend scoring may reveal itself to be unfeasible depending on data availability. In this case,it should be replaced with a “?”.
The highest rating is thus represented as “20A=”, the lowest as “1E=” and the midpoint as “10C=”.

TABLE 3: LOWEST, HIGHEST AND MIDPOINT FOR EACH ACT SCORE TYPE

LO W SC OR ES

MID SC ORE S

1,E,-

HI G H SC ORE S

10,C,=

20,A,+

See the ACT Framework [1] for general information and methodology on the ACT rating.

7.1. NARRATIVE SCORING
Narrative scoring shall be performed in compliance with the ACT Framework.
The information reported in Module 2 and 4 shall be considered with peculiar attention for the narrative
analysis and narrative scoring: with this information, the analyst can take a holistic view on the company’s
actions to perform a low-carbon transport service, and assess the consistency of actions taken with respect
to targets, business model and engagement with other stakeholders.
RELEVANT PERFORMANCE INDICATORS FOR NARRATIVE SCORING FOR ACT GENERIC

ModuleIndicator
GE 2.2 Trend in future emissions intensity from material investment

Material
investments

GE 2.3 Share of low-carbon CAPEX
GE 2.4 Locked-in emissions

Management

GE 5.3 Low-carbon transition plan

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Policy engagement

Business Model

GE 8.2 Trade associations supported do not have climate-negative
activities or positions
GE 8.3 Position on significant climate policies
GE 9.1 Identification of the level of decarbonization required
GE 9.2 Integration of the low-carbon economy in current andfuture business model
GE 9.3 Share of low-carbon clients

Other indicators might also be relevant in the calculation of the narrative score.

7.2. TREND SCORING
Scoring shall be performed in compliance with the ACT Framework.
To apply the trend scoring methodology presented in the ACT Framework, the analyst should identify thetrends from the existing data infrastructure based on the data points and/or indicators that can indicate thefuture direction of change within the company.
The table below includes an overview of which indicators/data points could possibly have valuable information
about future directions for ACT Generic.
RELEVANT PERFORMANCE INDICATORS FOR TREND SCORE

ModuleIndicator
GE 1.1 Alignment of direct emissions reduction targets
GE 1.2 Alignment of upstream indirect emissions reduction targets

Targets

GE 1.3 Alignment of downstream indirect emissions reduction
targets
GE 1.4 Time horizon of targets

Material Investment
Management

GE 2.2 Trend in future emissions intensity
GE 5.3 Low-carbon transition plan
GE 5.5 Climate change scenario testing

Other indicators might also be relevant in the calculation of the narrative score.

8. Aligned state
The table below presents the response of a low-carbon aligned company of the sector to the 5 questions of
ACT: What is the company planning to do? [Commitment] How is the company planning to get there? [Transition Plan] What is the company doing at present? [Present] What has the company done in the recent past? [Legacy]

page 138 How do all of these plans and actions fit together? [Consistency]

TRANSITION PLAN

LEGACYPRESENTCOMMITMENTCONSISTENCYFIGURE 2: ALIGNED STATE FOR COMPANIES IN THE AGRICULTURE & AGRIFOOD SECTOR

1

2

3

4

5

The company has

The company’s

Current share of

The trend is

The company’s

science-based

strategic planning

products andevident oftargets, transition

targets for its

details theplans are shifting

lowering

plan, present

activity and for all

investments andto low-carbon

emissionsactions and past

agriculturalshifts towards a

products.

intensity along all

legacy show aemissions. The

low-carbon foodthe value chain.

consistenttargets have avalue chain.

The company has

willingness toconsistent time

Actions toalreadyachieve the goals

horizon with the

incentivize

implemented

of low-carbon

lifetime of assets.

dietary changes

actions over thetransition,

are included.

last 5 years toespecially bylower its

developing new

emissions andfood business

reduce foodmodels.

waste.

page 139

9. Sources[1] OECD Environment Working Papers No. 89 (2015)[2] The European Patent Office (EPO, 2017)[3] US Patent and Trademark Office (USPTO)[4] IPCC Special Report on Global Warming of 1.5°C (SR15)[5] ACT Methodological Framework[6] List of NACE codes[7] RGR EU15 scenario for 2030 [10] - Zero leakage tolerance in 2050.
[8] IAE, Energy Technologies Perspectives[9] ACT Real Estate[10] ACT Auto[11] ACT Transport[12] ACT Cement[13] ACT Oil & Gas[14] ACT Electric Utilities[15] SBT absolute contraction[16] SDA power generation[17] SDA service building

page 140

10. Glossary
2 DEGREES (2°C)

A political agreement was reached at COP21 on limiting global warming to 2°C above
the pre-industrial level (COP21: Why 2°C?). A 2°C scenario (or 2°C pathway) is a
scenario (or pathway) compatible with limiting global warming to 2°C above the preindustrial level.

ACT

The Assessing low-Carbon Transition (ACT) initiative was jointly developed by
ADEME and CDP. ACT assesses how ready an organization is to transition to a lowcarbon world using a future-oriented, sector-specific methodology (ACT website).

ACTION GAP

In relation to emissions performance and reduction, the action gap is the difference
between what a given company has done in the past plus what it is doing now, andwhat has to be done. For example, companies with large action gaps have done
relatively little in the past, and their current actions point to continuation of pastpractices.

ACTIVITY DATA

Activity data are defined as data on the magnitude of human activity resulting inemissions or removals taking place during a given period of time (UNFCCC
definitions).

ADEME

Agence de l'Environnement et de la Maîtrise de l'Energie; The French Environment
and Energy Management Agency (ADEME webpage).

ADVANCED VEHICLE

Advanced vehicles include:♦

Plug-in hybrid vehicles (PHEV)♦

Battery electric vehicles (BEV)♦

Fuel cell electric vehicles (FCEV)♦

Conventional hybrids♦

Other high-efficiency ICE vehicles

Conventional hybrids and other high-efficiency ICE vehicles are advanced vehicles but
they are not low-carbon vehicles.
ALIGNMENTThe ACT project seeks to gather information that will be consolidated into a rating thatis intended to provide a general metric of the 2-degree alignment of a given company.
The wider goal is to provide companies specific feedback on their general alignment
with 2-degrees in the short and long term.

ANALYST

Person in charge of the ACT assessment.

ASSESS

Under the ACT project, to evaluate and determine the low-carbon alignment of a given
company. The ACT assessment and rating will be based on consideration of a range
of indicators. Indicators may be reported directly from companies. Indicators may also
be calculated, modelled or otherwise derived from different data sources supplied by
the company. The ACT project will measure 3 gaps (Commitment, Horizon and Action
gaps – defined in this glossary) in the GHG emissions performance of companies. Thismodel closely follows the assessment framework presented above. It starts with the
future, with the goals companies want to achieve, followed by their plans, current
actions and past actions.

ASSET

An item of property owned by a company, regarded as having value and available tomeet debts, commitments, or legacies. Tangible assets include 1) fixed assets, suchpage 141

as machinery and buildings, and 2) current assets, such as inventory. Intangible assets
are nonphysical such as patents, trademarks, copyrights, goodwill and brand value.
AU

Abbreviation of the ‘Automotive’ sector

BARRIERA circumstance or obstacle preventing progress (e.g. lacking information on supplieremissions and hotspots can be a barrier to companies managing and reducing their
upstream indirect emissions).

BASE YEAR

According to the GHG Protocol and ISO14064-1, a base year is “a historic datum (aspecific year or an average over multiple years) against which a company’s emissions
are tracked over time”. Setting a base year is an essential GHG accounting step thata company must take to be able to observe trends in its emissions information (GHG
Protocol Corporate Standard).

BC

Abbreviation of the ‘Building Construction’ sector

BENCHMARKA standard, pathway or point of reference against which things may be compared. In
the case of pathways for sector methodologies, a sector benchmark is a low-carbon
pathway for the sector average value of the emissions intensity indicator(s) driving thesector performance. A company’s benchmark is a pathway for the company value ofthe same indicator(s) that starts at the company performance for the reporting year
and converges towards the sector benchmark in 2050, based on a principle ofconvergence or contraction of emissions intensity.

BOARD

Also the “Board of Directors” or “Executive Board”; the group of persons appointed
with joint responsibility for directing and overseeing the affairs of a company.

BUSINESS MODEL

A plan for the successful operation of a business, identifying sources of revenue, theintended customer base, products, and details of financing. Under ACT, evidence ofthe business model shall be taken from a range of specific financial metrics relevantto the sector and a conclusion made on its alignment with low-carbon transition andconsistency with the other performance indicators reported.

BUSINESS-AS-USUALNo proactive action taken for change. In the context of the ACT methodology, thebusiness-as-usual pathway is constant from the initial year onwards. In general, theinitial year – which is the first year of the pathway/series – is the reporting year (targets
indicators) or the reporting year minus 5 years (performance indicators).

CAPACITY (POWER)

In relation to power generation, nameplate capacity is the power output number,usually expressed in megawatts (MW), and registered with authorities for classifying
the power output of a power station.

CAPITAL EXPENDITURE

Money spent by a business or organization on acquiring or maintaining fixed assets,such as land, buildings, and equipment.

CARBON CAPTURE AND
STORAGE (CCS)The process of trapping carbon dioxide produced by burning fossil fuels or otherchemical or biological process and storing it in such a way that it is unable to affect theatmosphere.

CARBON OFFSETS

Carbon offsets are avoidance of GHG emissions or GHG suppressions made by acompany, sector or economy to compensate for emissions made elsewhere in theeconomy, where the marginal cost of decarbonization proves to be lower.

CDP

Formerly the "Carbon Disclosure Project", CDP is an international, not-for-profit
organization providing the only global system for companies and cities to measure,disclose, manage and share vital environmental information. CDP works with market
forces, including 827 institutional investors with assets of over US$100 trillion, tomotivate companies to disclose their impacts on the environment and natural
page 142

resources and take action to reduce them. More than 5,500 companies worldwide
disclosed environmental information through CDP in 2015. CDP now holds the largest
collection globally of primary climate change, water and forest risk commodities
information and puts these insights at the heart of strategic business, investment andpolicy decisions (CDP website).
CLIMATE CHANGE

A change in climate, attributed directly or indirectly to human activity, that alters thecomposition of the global atmosphere and that is, in addition to natural climate
variability, observed over comparable time periods (UNFCCC).

COMMITMENT GAP

In relation to emissions performance, the difference between what a company needs
to do and what it says it will do.

COMPANY

A commercial business.

COMPANY PATHWAY

A company’s past emissions intensity performance pathway up until the present.

COMPANY TARGETThe emissions intensity performance pathway that the company has committed to

PATHWAY

follow from the initial year on until a future year, for which it has set a performancetarget.

CONFIDENTIAL

Any non-public information pertaining to a company's business.

INFORMATIONCONSERVATIVENESS

A principle of the ACT project; whenever the use of assumptions is required, theassumption shall err on the side of achieving 2-degrees maximum.

CONSISTENCY

A principle of the ACT project; whenever time series data is used, it should becomparable over time. In addition to internal consistency of the indicators reported by
the company, data reported against indicators shall be consistent with otherinformation about the company and its business model and strategy found elsewhere.
The analyst shall consider specific, pre-determined pairs of data points and check thatthese give a consistent measure of performance when measured together.

CONVENTIONAL(TECHNOLOGY)

In relation to automobiles and emissions, conventional internal combustion engines(ICE) are those that generate motive power by burning fossil fuels, as opposed toadvanced (low-carbon) vehicle engines such as battery electric vehicles or hydrogenfuel cells.

COP21

The 2015 United Nations Climate Change Conference, held in Paris, France from 30
November to 12 December 2015 (COP21 webpage).

DATA

Facts and statistics collected together for reference and analysis (e.g. the data points
requested from companies for assessment under the ACT project indicators).

DECARBONIZATION

A complete or near-complete reduction of greenhouse gas emissions over time (e.g.
decarbonization in the electric utilities sector by an increased share of low-carbon
power generation sources, as well as emissions mitigating technologies like Carbon
Capture and Storage (CCS)).

EMISSIONSThe GHG Protocol defines direct GHG emissions as emissions from sources that are
owned or controlled by the reporting entity, and indirect GHG emissions as emissions
that are a consequence of the activities of the reporting entity, but occur at sources
owned or controlled by another entity (GHG Protocol).

ENERGYPower derived from the utilization of physical or chemical resources, especially toprovide light and heat or to work machines.

EU

Abbreviation of the ‘Electric Utilities’ sector.

FLEET

A group of vehicles (e.g. all the automobiles manufactured by an automotive
manufacturing company and currently in use by private individuals).
page 143

FOSSIL FUEL

A natural fuel such as coal, oil or gas, formed in the geological past from the remainsof living organisms.

FUTUREA period of time following the current moment; time regarded as still to come.

GREENHOUSE GAS(GHG)Greenhouse gas (e.g. carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) andthree groups of fluorinated gases (sulfur hexafluoride (SF6), hydrofluorocarbons(HFCs), and perfluorocarbons (PFCs)) which are the major anthropogenic GHGs andare regulated under the Kyoto Protocol. Nitrogen trifluoride (NF3) is now considered apotent contributor to climate change and is therefore mandated to be included innational inventories under the United Nations Framework Convention on Climate
Change (UNFCCC).

GUIDANCE

Documentation defining standards or expectations that are part of a rule or
requirement (e.g. CDP reporting guidance for companies).

HORIZON GAP

In relation to emissions performance, the difference between the average lifetime of acompany’s production assets (particularly carbon intensive) and the time-horizon of its
commitments. Companies with large asset-lives and small-time horizons do not look
far enough into the future to properly consider a transition plan.

INCENTIVE

A thing, for example money, that motivates or encourages someone to do something(e.g. a monetary incentive for company board members to set emissions reduction
targets).

INDICATOR

An indicator is a quantitative or qualitative piece of information that, in the context of
the ACT project, can provide insight on a company’s current and future ability to reduce
its carbon intensity. In the ACT project, 3 fundamental types of indicators can beconsidered:♦

Key performance indicators (KPIs);♦

Key narrative indicators (KNIs); andKey asset indicators (KAIs).
INTENSITY(EMISSIONS)♦INTERVENTION

Methods available to companies to influence and manage emissions in their value

The average emissions rate of a given pollutant from a given source relative tothe intensity of a specific activity; for example, grams of carbon dioxide released
per MWh of energy produced by a power plant.

chain, both upstream and downstream, which are out of their direct control (e.g. a retailcompany may use consumer education as an intervention to influence consumer
product choices in a way that reduces emissions from the use of sold products).
LIFETIME

The duration of a thing's existence or usefulness (e.g. a physical asset such as a power
plant).

LONG-TERM

Occurring over or relating to a long period of time; under ACT this is taken to mean
until the year 2050. The ACT project seeks to enable the evaluation of the long-term
performance of a given company while simultaneously providing insights into shortand medium-term outcomes in alignment with the long-term.

LOW-CARBON

Benchmark pathway (See ‘Benchmark’)

BENCHMARK PATHWAY

LOW-CARBONSCENARIO (ORPATHWAY)
LOW-CARBON
SOLUTION

LOW-CARBON
TRANSITION

A low-carbon scenario (or pathway) is a 2°C scenario, a well-below 2°C scenario or a
scenario with higher decarbonization ambition.
A low-carbon solution (e.g. energy, technology, process, product, service, etc.) is asolution whose development will contribute to the low-carbon transition.
The low-carbon transition is the transition of the economy according to a low-carbon
scenario.
page 144

LOW-CARBON VEHICLE

Vehicles described as low-carbon (LCV) are defined as vehicles that have a drivetrain
that have the potential to operate on non-fossil energy sources for at least > 50% of
their common use phase. This includes:♦

Plug-in hybrid vehicles (PHEV)♦

Battery electric vehicles (BEV)♦

Fuel cell electric vehicles (FCEV)

Conventional hybrids are excluded from the definition of low-carbon vehicles. Because
conventional hybrids do not eschew fossil fuels (aside from the minor addition of
biofuels into the fuel mix), they are not qualified for the definition of an LCV.
MANUFACTURE

Making objects on a large-scale using machinery.

MATURITY MATRIXA maturity matrix is essentially a “checklist”, the purpose of which is to evaluate how
well advanced a particular process, program or technology is according to specificdefinitions.

MATURITYPROGRESSION

An analysis tool used in the ACT project that allows both the maturity and development
over time to be considered with regards to how effective or advanced a particularintervention is.

MITIGATION(EMISSIONS)

The action of reducing the severity of something (e.g. climate change mitigation

MODEL

A program designed to simulate what might or what did happen in a situation (e.g.

through absolute GHG emissions reductions)climate models are systems of differential equations based on the basic laws ofphysics, fluid motion, and chemistry that are applied through a 3-dimensional grid
simulation of the planet Earth).

PATHWAY (EMISSIONS)

A way of achieving a specified result; a course of action (e.g. an emissions reduction
pathway).

PERFORMANCE

Measurement of outcomes and results.

PLAN

A detailed proposal for doing or achieving something.

POINT

A mark or unit of scoring awarded for success or performance.

POWER

Energy that is produced by mechanical, electrical, or other means and used to operatea device (e.g. electrical energy supplied to an area, building, etc.).

POWER GENERATION

The process of generating electric power from other sources of primary energy.

PRIMARY ENERGY

Primary energy is an energy form found in nature that has not been subjected to any
conversion or transformation process. It is energy contained in raw fuels, and otherforms of energy received as input to a system. Primary energy can be non-renewableor renewable.

PROGRESS RATIO

An indicator of target progress, calculated by normalizing the target time percentage
completeness by the target emissions or renewable energy percentage completeness.

RELEVANT /RELEVANCEIn relation to information, the most relevant information (core business and

RENEWABLE ENERGY

Energy from a source that is not depleted when used, such as wind or solar power.

REPORTING YEAR

Year under consideration.

RESEARCH AND
DEVELOPMENT (R&D)

A general term for activities in connection with innovation; in industry; for example, thisstakeholders) to assess low-carbon transition.

could be considered work directed towards the innovation, introduction, andimprovement of products and processes.

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RT

Abbreviation of the ‘Retail’ sector

SCENARIOThe Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate
Change (IPCC) presents the results of an extensive climate modelling effort to makepredictionsofchangesintheglobalclimate

based

on

a

range

of

development/emissions scenarios. Regulation on climate change-related issues may
present opportunities for your organization if it is better suited than its competitors tomeet those regulations, or more able to help others to do so. Possible scenarios would
include a company whose products already meet anticipated standards designed tocurb emissions, those whose products will enable its customers to meet mandatory
requirements or those companies that provide services assisting others in meeting
regulatory requirements.
SCENARIO ANALYSIS

A process of analysing possible future events by considering alternative possible
outcomes.

SCIENCE-BASEDTARGET

To meet the challenges that climate change presents, the world’s leading climate
scientists and governments agree that it is essential to limit the increase in the global
average temperature at below 2°C. Companies making this commitment will beworking toward this goal by agreeing to set an emissions reduction target that isaligned with climate science and meets the requirements of the Science-Based
Targets Initiative.

SCOPE 1 EMISSIONSAll direct GHG emissions (GHG Protocol Corporate Standard).

SCOPE 2 EMISSIONS

Indirect GHG emissions from consumption of purchased electricity, heat or steam(GHG Protocol Corporate Standard).

SCOPE 3 EMISSIONSOther indirect emissions, such as the extraction and production of purchased materials
and fuels, transport-related activities in vehicles not owned or controlled by thereporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2,
outsourced activities, waste disposal, etc. (GHG Protocol Corporate Standard).

SECTORA classification of companies with similar business activities, e.g. automotive
manufacturers, power producers, retailers, etc.

SECTORALDECARBONIZATIONAPPROACH (SDA)

To help businesses set targets compatible with 2-degree climate change scenarios,
the Sectoral Decarbonization Approach (SDA) was developed. The SDA takes asector-level approach and employs scientific insight to determine the least-cost
pathways of mitigation, and converges all companies in a sector towards a sharedemissions target in 2050.

SHORT-TERM

Occurring in or relating to a relatively short period of time in the future.

STRATEGY

A plan of action designed to achieve a long-term or overall aim. In business, this is themeans by which a company sets out to achieve its desired objectives; long-termbusiness planning.

STRESS TEST

A test designed to assess how well a system functions when subjected to greater thannormal amounts of stress or pressure (e.g. a financial stress test to see if an oil & gas
company can withstand a low oil price).

SUPPLIER

A person or entity that is the source for goods or services (e.g. a company that provides
engine components to an automotive manufacturing company).

TARGET

A quantifiable goal (e.g. to reduce GHG emissions).
♦

The following are examples of absolute targets:→ metric tonnes CO2e or % reduction from base year

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→ metric tonnes CO2e or % reduction in product use phaserelative to base year
→ metric tonnes CO2e or % reduction in supply chain relative tobase year♦

The following are examples of intensity targets:→ metric tonnes CO2e or % reduction per passenger. Kilometre(also per km; per nautical mile) relative to base year
→ metric tonnes CO2e or % reduction per square foot relative tobasemetric tonnes CO2e or % reduction per MWh
TECHNOLOGY

The application of scientific knowledge for practical purposes, especially in industry(e.g. low-carbon power generation technologies such as wind and solar power, in theelectric power generation sector).

TRADE ASSOCIATION→ Trade associations (sometimes also referred to as industry
associations) are an association of people or companies in aparticular business or trade, organized to promote their common
interests. Their relevance in this context is that they present an“industryvoice”

togovernments

toinfluencetheirpolicydevelopment. The majority of organizations are members of multiple
trade associations, many of which take a position on climate change
and actively engage with policymakers on the development of policy
and legislation on behalf of their members. It is acknowledged thatin many cases companies are passive members of tradeassociations and therefore do not actively take part in their work on
climate change (CDP climate change guidance).
TRANSITION

The process or a period of changing from one state or condition to another (e.g. froman economic system and society largely dependent on fossil fuel-based energy, to one
that depends only on low-carbon energy).

TRANSPORT

To take or carry (people or goods) from one place to another by means of a vehicle,
aircraft, or ship.

TREND

A general direction in which something (e.g., GHG emissions) is developing orchanging.

VERIFIABLE /VERIFIABILITY

To prove the truth of, as by evidence or testimony; confirm; substantiate. Under the

WEIGHTING

The allowance or adjustment made in order to take account of special circumstances

ACT project, the data required for the assessment shall be verified or verifiable.
or compensate for a distorting factor.

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11. Appendix


CDP/NACE CORRESPONDENCE

NACE classification

Proposed correspondence with CDP (CDP
Activity Group)

AGRICULTURE, FORESTRY AND FISHING
Crop and animal production, hunting and related

Crop farming

service activities

Fish & animal farming

Forestry and logging

Logging & rubber tapping

Fishing and aquaculture

Fish & animal farming

MINING AND QUARRYING
Mining of coal and lignite

Coal mining

Extraction of crude petroleum and natural gas

Oil & gas extraction & production

Mining of metal ores

Metallic mineral mining

Other mining and quarrying

Other mineral mining

Mining support service activities

Industrial support services

MANUFACTURING
Manufacture of food products
Food & beverage processing
Manufacture of beverages
Manufacture of tobacco products

TobaccoManufacture of textiles
Manufacture of wearing apparelTextiles & fabric goods

Manufacture of leather and related products
Manufacture of wood and of products of wood andcork, except furniture; manufacture of articles ofWood and rubber products

straw and plaiting materials

Wood & paper materials

Manufacture of paper and paper products

Paper products & packaging

Printing and reproduction of recorded media

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Manufacture of coke and refined petroleum products

Oil & gas processing

Manufacture of chemicals and chemical products

Chemicals

Manufacture of basic pharmaceutical products andpharmaceutical preparations

Biotech & pharma

Manufacture of rubber and plastic productsLight manufacturing
Plastic product manufacturing
Wood and rubber products

Manufacture of other non-metallic mineral products

Cement & concrete
Other materials

Manufacture of basic metals
Metal products manufacturing
Manufacture of fabricated metal products, except

Metal smelting, refining & forming

machinery and equipment
Manufacture of computer, electronic and opticalproducts

Electrical & electronic equipment

Manufacture of electrical equipment
Manufacture of machinery and equipment n.e.c.

Powered machinery

Manufacture of motor vehicles, trailers and semitrailers

Transportation equipment

Manufacture of other transport equipment
Manufacture of furniture

Leisure & home manufacturing

Other manufacturing

Medical equipment & supplies

Repair and installation of machinery and equipment

Powered machinery

ELECTRICITY, GAS, STEAM AND AIR
CONDITIONING SUPPLYElectricity, gas, steam and air conditioning supply

Energy utility networks
Oil & gas retailing
Biomass & waste generation
Nuclear power generation
Renewable power generation
Thermal power generation
Industrial support services

WATER SUPPLY; SEWERAGE, WASTE
MANAGEMENT AND REMEDIATION ACTIVITIES

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Water collection, treatment and supply
Sewerage
Waste collection, treatment and disposal activities;

Non-energy utilities

materials recovery
Remediation activities and other waste management
services
CONSTRUCTION
Construction of buildings

Construction

Civil engineering

Specialized professional services

Specialised construction activities

Construction

WHOLESALE AND RETAIL TRADE; REPAIR OF
MOTOR VEHICLES AND MOTORCYCLES
Wholesale and retail trade and repair of motor
vehicles and motorcycles
Convenience retail
Wholesale trade, except of motor vehicles andDiscretionary retailmotorcycles

Trading, wholesale, distribution, rental & leasing

Retail trade, except of motor vehicles andmotorcycles
TRANSPORTATION AND STORAGE
Land transport and transport via pipelines

Oil & gas storage and transportation
Intermodal transport & logistics
Rail transport
Road transport

Water transport

Marine transport

Air transport

Air transport

Warehousing and support activities fortransportation

Industrial support services

Postal and courier activities
ACCOMMODATION AND FOOD SERVICE ACTIVITIESAccommodation
Bars, hotels & restaurants
Food and beverage service activities
INFORMATION AND COMMUNICATION

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Publishing activities

Motion picture, video and television programme
production, sound recording and music publishingactivities

Media, telecommunications & data center
services
Print & publishing services
Web & marketing services

Programming and broadcasting activities
Telecommunications
Computer programming, consultancy and related
activities
Information service activities

IT & software development
Media, telecommunications & data center
services

FINANCIAL AND INSURANCE ACTIVITIESFinancial service activities, except insurance andpension funding
Insurance, reinsurance and pension funding, except
compulsory social security

Financial services

Activities auxiliary to financial services andinsurance activities
REAL ESTATE ACTIVITIESReal estate activities

Land & property ownership & development

PROFESSIONAL, SCIENTIFIC AND TECHNICALACTIVITIESLegal and accounting activities
Activities of head offices; management consultancy
activities
Architectural and engineering activities; technicaltesting and analysis
Scientific research and development

Specialized professional services

Advertising and market research
Other professional, scientific and technical activities
Veterinary activities

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ADMINISTRATIVE AND SUPPORT SERVICEACTIVITIES
Rental and leasing activities
Employment activities
Travel agency, tour operator and other reservation
service and related activities
Commercial & consumer services
Security and investigation activities
Services to buildings and landscape activities
Office administrative, office support and otherbusiness support activities
PUBLIC ADMINISTRATION AND DEFENCE;COMPULSORY SOCIAL SECURITY
Public administration and defence; compulsory
social security

International bodies

EDUCATION
Education

Other services

HUMAN HEALTH AND SOCIAL WORK ACTIVITIESHuman health activities

Health care provision
Other services

Residential care activities
Social work activities without accommodation

Other services

ARTS, ENTERTAINMENT AND RECREATION
Creative, arts and entertainment activities
Libraries, archives, museums and other culturalactivities

Entertainment facilities

Gambling and betting activities
Sports activities and amusement and recreation
activities
OTHER SERVICE ACTIVITIES
Activities of membership organisations
Repair of computers and personal and household

Other services

goods

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Other personal service activities
ACTIVITIES OF HOUSEHOLDS AS EMPLOYERS;
UNDIFFERENTIATED GOODS- AND SERVICESPRODUCING ACTIVITIES OF HOUSEHOLDS FOROWN USE
Activities of households as employers of domestic
personnel
Undifferentiated goods- and services-producing

Other services

activities of private households for own use
ACTIVITIES OF EXTRATERRITORIAL
ORGANISATIONS AND BODIES
Activities of extraterritorial organisations and bodies

International bodies

INFORMATION ON EU GREEN TAXONOMY

The European Green Taxonomy is a classification system – or taxonomy – for sustainable activities. Its firstgoal is to create a common language for all actors in the financial system, to allow investors and companies
to identify sectors that generate environmental benefits.
To be included in the framework, economic activities have to make a substantial contribution to climatechange mitigation or adaptation, while avoiding significant harm to the four other environmental objectives:
sustainable use and protection of water and marine resources, transition to a circular economy, pollution
prevention control, and protection and restoration of biodiversity and ecosystems.
In order to develop recommendations for technical screening of the economic activities, a Technical Expert
Group (TEG) on sustainable finance has been established by the European Commission in July 2018. The
TEG published its final report on March 2020. The report contains recommendations relating to the design of
the EU taxonomy, as well as extensive implementation guidance on how companies and financial institutions
can use and disclose against the taxonomy.
The Taxonomy Regulation was published on 22 June 2020 in the Official Journal of the European Union andentered into force on 12 July 2020. This is the final version of the taxonomy, but it will be updated in the
coming years. It is therefore necessary to refer to the latest available version of the taxonomy.
The last version available of the technical annex to the TEG final report on the EU taxonomy:
https://ec.europa.eu/info/files/200309-sustainable-finance-teg-final-report-taxonomy-annexes_en
The sectors covered by the taxonomy are summarised on page 13 of the document.

The TEG has also prepared Excel tools to help users of the Taxonomy to implement it in their own activities:
https://ec.europa.eu/info/files/sustainable-finance-teg-taxonomy-tools_en

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● BUILDING LOCKED-IN EMISSIONS

The analysis is based on the ratio between the company’s managed buildings’ emissions from the reporting
year [LG (t)] to 2050, and the emissions budget entailed by the company’s carbon budget [B G (t)] over thesame period of time. For each type of building, the locked-in emissions are based on the current emissions
released until the next planned renovation. After the renovation, the locked-in emissions are based on the
expected reduction of energy consumption = current emissions – emissions saving expected related to therenovation. If there is no expected saving, the reduction in emissions is set by default at 25% of the current
emissions. If no renovation is planned, the locked-in emissions are based on the emissions of reporting year.
The emissions lock-in are integrals (see following calculations).
As an example, company A manages retail building and residential buildings. For its retail portfolio, thecompany plans a renovation in 2035 which will reduce total emissions of 25%. No renovation is planned forresidential buildings. The company’s locked-in emissions are presented in the following chart:

LG (t) is calculated as the total cumulative emissions implied by the lifetimes of buildings managed in theproperty portfolio.
LG (t) is calculated as the company’s locked-in carbon commitments, up until the chosen time period t, which
is derived by taking the area under the company’s future locked-in emissions curve. This curve in turn isderived from the company’s intensity pathway, multiplying with floor area emission intensity F G:𝑡

𝐿𝐺 (𝑡) =∫𝐹𝐺 ∗ 𝐶𝐴𝐺𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟

BG (t) is calculated as the company’s carbon budget up until time t, which is derived by taking the area under
the absolute emissions reduction curve. This curve in turn is derived from the company benchmark pathway(CBG) by multiplying with floor area emission intensity FG:

page 158𝑡

𝐵𝐺 (𝑡) =∫𝐹𝐺 ∗ 𝐶𝐵𝐺𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟

FIGURE 1 – ILLUSTATION OF CARBON BUDGET:

Depending on the data availability, the computation of these areas may not be as straightforward as theequations present and will be done by approximation, but the principles will hold.
The locked-in ratio (rLB) is calculated:𝑟𝐿𝐵 (𝑡) =𝐿𝐺 (𝑡)𝐵𝐺 (𝑡)

Calculation of score

If rLB is 1 or lower, then the company stays within its carbon budget, and will be assigned the maximum score(100%). If rLB is 1.5 or higher, then the company strongly exceeds its carbon budget, and will be assigned theminimum score (0%). If rLB is between 1 and 1.5, then the company will be assigned a score of 1.5- rLB divided
by 50%.
Fleet locked-in emissions
The analysis is based on the ratio between the company’s emissions from existing and planned fleet for the
15 forthcoming years after reporting years (Locked-in Emissions from fleet LEF (yr+15)) and the emissions
budget entailed by the company’s carbon budget (B(yr+15)) over the same period of time. The investment
plans won’t need to go as far as yr+15, or they can go further depending on the mode. Typically, a truck put
into service in 2025 will still operate in 2035-40, an aircraft delivered in 2025 will still fly in 2050, etc.

𝐿𝐸𝐹 (𝑦𝑟 + 15)represents the total cumulative emissions implied on the period of operation of currently active
and confirmed planned fleet vehicles that are going to be commissioned in the near future. If unknown, thecommissioning year of vehicles is estimated from investment plans.

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𝐿𝐸𝐹 (𝑦𝑟 + 15)is calculated by taking the area under the company’s future locked-in emissions curve. This curvein turn is derived from the company’s intensity pathway for its transport services CI, multiplied by the transport
activity AT:

𝑦𝑟 +15

𝐿𝐸𝐹 (𝑦𝑟 + 15) =∫𝐴 ∗ 𝐶𝐼𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟

Figure 2 illustrates locked-in emissions of one vehicle and of the whole fleet.

FIGURE 3 : COMPUTING LOCKED-IN EMISSIONS FROM FLEET

𝐵(𝑦𝑟 + 15)is calculated as the company’s carbon budget up to reporting year + 15 years, which is derived bytaking the area under the absolute emissions reduction curve. This curve in turn is derived from the company
benchmark pathway 𝐶𝐵𝑇 by multiplying it by transport activity AT:

𝑦𝑟 +15𝐵(𝑦𝑟 + 15) =∫𝐴𝑇 ∗ 𝐶𝐵𝑇𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑦𝑒𝑎𝑟

The company’s benchmark is computed from the company’s current emissions at reporting year and the levelof carbon intensity defined by the sectoral benchmark. The carbon budget is illustrated below :page 160

FIGURE 4 : CARBON BUDGET DERIVED FROM THE COMPANY'S BENCHMARK

Depending on the data availability, the computation of these areas may not be as straightforward as theequations shown and will be done by approximation, but the principles will hold.

The locked-in ratio rLB is illustrated in Figure 4 and calculated as follows:𝑟𝐿𝐵 (𝑦𝑟 + 15) =𝐿𝐸𝐹 (𝑦𝑟 + 15)
𝐵(𝑦𝑟 + 15)

FIGURE 4 : ILLUSTRATION OF THE LOCKED-IN RATIO

To be able to give a score regarding the amount of carbon budget consumed, the level of activity performed
with the fleet needs to be taken into account. Therefore, in a similar way to locked-in emissions, the level ofactivity that the company is able to perform thanks to the vehicles in its current and planned fleet, per year. It
is called the secured activity and is illustrated in Figure 5.

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FIGURE 5 : SECURED ACTIVITY BY THE FLEETThe secured activity is compared to the level of activity projected by the company up to reporting year + 15
years. If the company does not have any projections or not up to reporting year + 15 years, it will be consideredthat its market share will remain constant and its activity will evolve at the same rate as the sector and sectoral
projection of activity are used (see section Erreur ! Source du renvoi introuvable.). The company’s projected
activity is illustrated in Erreur ! Source du renvoi introuvable.

FIGURE 6 : PROJECTED ACTIVITY

The secured activity ratio 𝑟𝑆𝐴 (𝑦𝑟 + 15) compares the secured activity up to 2050 𝐴𝑆 (𝑦𝑟 + 15) with the
projected activity up to 2050 𝐴𝑝 (𝑦𝑟 + 15)It is illustrated in Figure 7

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FIGURE 7 : SECURED ACTIVITY RATIOC A LC U LA TI O N OF T HE S C OR E :rSA is used as a threshold value for the scoring:
RSA<1: MORE INVESTMENTS WILL BE NEEDEDrLB≤rSA

100%
rLB-1.1
rSA-1.1

rSA<rLB<1.1

rLB≥1.1

0%CASE OF FLEET COMPOSED OF LEASING VEHICLES
If the company operates leased vehicles the locked-in emissions are calculated up to the end of the longest
leasing contract instead of to reporting year + 15 years, as illustrated in Erreur ! Source du renvoi introuvable.
below.

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FIGURE 8 : LOCKED-IN RATIO IN CASE OF LEASED VEHICLES

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