Asset with emissions intensity required by the sector and regional pathway for 2050 and whose operational model will maintain this performance.
As with all asset classes, the asset alignment target can be can be split into the five steps.
All assets within listed equity and corporate fixed income portfolios and funds are recommended to be considered within initial scope. Within this, all sectors considered “material” to the net zero transition, defined as those in NACE code categories A-H and J-L, are recommended to be considered for assessment and subject to the asset alignment target.
The alignment assessment utilises six alignment criteria.
High impact companies are encouraged to be assessed against all six alignment criteria, which includes the asterisked criteria in the table below. All other companies are deemed material but ‘lower impact’. Investors can assess the alignment of lower impact material companies against the criteria: ambition, targets; disclosure; and emissions performance.
Asset with emissions intensity required by the sector and regional pathway for 2050 and whose operational model will maintain this performance.
Emissions performance: Current absolute or emissions intensity is at least equal to a relevant net zero pathway.
Capital allocation alignment*: A clear demonstration that capital expenditures are consistent with a relevant net zero pathway.
Decarbonisation plan*: A quantified set of measures exists to achieve short and medium term science-based targets by reducing GHGs and increasing green revenues, when relevant.
Disclosure: Disclosure of operational scope 1, 2 and material scope 3 emissions.
Targets: Short and medium term science-based targets to reduce GHG emissions.
Ambition: A long term goal consistent with the global goal of achieving net zero by 2050.
*Additional alignment criteria that a corporate within a high impact material sector needs to meet.
Investors are recommended to use the following data sources to assess the alignment of their listed equity and corporate fixed income assets where possible:
An excerpt of the Implementation Guidance provides a mapping of pu