[SAMPLE] Climate Alignment Score | Evaluate the Climate Risk of 50,000+ Companies | Paris ...

The Climate Alignment Score (CAS) helps to understand if a company or your portfolio is 2°C-aligned, in line with the Paris Agreement goal of limiting global warming below 2°C in the year 2100, compared with pre-industrial levels.

The CAS indicates how companies and investment portfolios align with global climate targets. For each company nine climate alignment scores are calculated based on a unique combination of Carbon Pricing (policy) scenarios and Carbon Removal (technology) pathways. These dimensions stem directly from the IPCC Special Report on Impacts of Global Warming. Since the scores are expressed in degrees Celsius, alignment can be easily related to the Paris Agreement goals.

In the Paris Agreement, alignment is defined by two temperature thresholds (+1.5°C and +2°C global mean temperature compared with pre-industrial levels). Misalignment occurs when scenarios surpass these predefined thresholds.

Under the category 'Misaligned' we identify two sub-categories:
Strongly Misaligned: Companies or portfolios falling within this bracket, with a CAS exceeding 3.2°C, are deemed severely misaligned with climate targets. Their impact on climate change exceeds even standard business-as-usual practices, posing a significant risk of exacerbating catastrophic climate events.
Misaligned: Entities within this category, with a CAS ranging between 2.0 and 3.2°C, fall short of meeting the Paris Agreement's objectives. Their decarbonization efforts are inadequate for effectively mitigating climate risks, as their transition pace is considered insufficient.

Companies within the category 'Aligned ' are considered to be meeting or exceeding climate targets:
2°C Aligned: Companies or portfolios in this range, with an CAS between 1.5 and 2.0°C, meet the Paris Agreement's minimum objective of limiting global temperature rise to +2°C compared to pre-industrial levels. They are actively engaged in transitioning towards a low-carbon economy.
1.5°C Aligned: Companies within this range, with a CAS at or below 1.5°C, align with the Paris Agreement's maximal objective of limiting global temperature rise to +1.5°C compared to pre-industrial levels. These entities are recognized as frontrunners in the shift towards a low-carbon future, playing a crucial role in mitigating the impacts of catastrophic climate change.

Many companies do not report their carbon emissions and only a few set reduction targets. This makes it intrinsically difficult to get an understanding of their performance in terms of climate change and future environmental developments. To overcome the lack of data, the CAS uses Oxari’s Corporate Carbon Estimator, which models Scope 1-3 emissions of non-reporting companies by using public company-, industry-, and country-level data and machine learning models trained on large corporate emission datasets. In this methodology, 2016 serves as the starting point for the time series, as the Paris Agreement shifted the focus to carbon reduction drastically and globally. As a result, there has been an increasing number of companies reporting on carbon emissions. Based on the historical and current reported and predicted values, the linear annual reduction is calculated and matched with the average annual reduction derived from the scenarios as described in the next section.

Our data is collected from publicly available company disclosures, over a period of 10+ years, using advanced web scraping tools. The data undergoes rigorous validation checks by our team of seasoned data analysts and ESG experts. They verify the data's accuracy and manage outliers, ensuring that you receive the most refined dataset. Post validation, the data undergoes algorithmic assurance and is capped off with approval from specialized team leads. This marriage of human expertise and machine efficiency guarantees the highest degree of data accuracy.

The data is provided via the Oxari Carbon API.