《世界基準聯盟（WBA）：2024公司轉型計劃可信度評估：框架及指導報告（英文版）（90頁）.pdf》由會員分享，可在線閱讀，更多相關《世界基準聯盟（WBA）：2024公司轉型計劃可信度評估：框架及指導報告（英文版）（90頁）.pdf（90頁珍藏版）》請在三個皮匠報告上搜索。

1、 1 ATP-Col framework and guidance V1,September 2024 Assessing the credibility of a companys transition plan:framework and guidance Assessing Transition Plan Collective(ATP-Col)Version 1,September 2024 2 ATP-Col framework and guidance V1,September 2024 Disclaimer Assessing Transition Plan Collective

2、ATP-Col is an international ad hoc working group of individual experts from different organisations(see appendix 8).Each expert had the opportunity to express and contribute to this document in an individual capacity and not as representative of their organisation.ATP-Cols goal is to try,in a non-co

3、mpetitive manor,to harmonise practices for assessing the credibility of a companys transition plan.ATP-Col was launched in June 2023 by the World Benchmarking Alliance(WBA)and is co-chaired by Romain Poivet of WBA and Perrine Toledano of the Columbia Center on Sustainable Investment Lead author:Roma

4、in POIVET,World Benchmarking Alliance.Nicolas Pickard Garcia(European Commission/Joint Research Center),Thomas Gourdon(European Commission/Joint Research Center)and Adrien Rose(Oxford Sustainable Finance Group)are co-authors of the Appendix 4.While the group strived for consensus,the document may no

5、t reflect every exact individual experts opinion involved in ATP-Col.The views expressed in this report are the sole responsibility of the authors and do not necessarily reflect those of the sponsors.The authors are solely responsible for any errors.Acknowledgement The co-chairs would like to thank

6、all the ATP-Col members who have been part of the collective effort,with special thanks to the following members who contributed written input for the first draft:Guillaume Bone(WWF France),Anna Creed(Climate Bonds Initiative),Thomas Gourdon(EU Joint Research Centre),Rachel Hemingway(Climate Bonds I

7、nitiative),Nicolas Pickard-Garcia(EU Joint Research Centre),Adrien Rose(Oxford Sustainable Finance Group),Andy Ross(CDP),Tom Wainwright(Climateworks Centre),Jonathan White(Client Earth).Additional thanks to Nicolas Sauviat(World Benchmarking Alliance)and Stanislas Ray(ADEME)for their support with ma

8、pping ATP-Col assessment criteria with CSRD and IFRS S2.Communications support:Dara Karakolis(World Benchmarking Alliance)3 ATP-Col framework and guidance V1,September 2024 Contents 1.Executive summary.5 2.Document scope.7 3.Introduction to transition plans.8 4.Company transition plan content and us

9、e cases.9 4.1 Definition of a transition plan.9 4.2 Transition plan elements.9 4.3 Intended users of a transition plan and use cases.11 4.4 Special case of enabling activities,climate solutions providers and transitioned activities 12 5.Sectoral transition plan.13 5.1 Definition and content of secto

10、ral transition plan.13 5.2 Selection of scenarios.13 5.3 Use of the sectoral transition plan.15 5.4 Regional considerations.16 6.Principles for assessment.17 6.1 Relevance,transparency and completeness.17 6.2 Ambition and feasibility.17 6.3 Consistency.18 6.4 Long-term value and just transition.18 7

11、.Assessment framework.18 7.1 General challenges.18 7.2 Concepts underlying transition plan credibility.19 7.3 Assessment process.20 8.Assessment items,red flags and assessment criteria.22 8.1 Connection between transition plan content and assessment criteria.22 8.2 Companys GHG accounting and perfor

12、mance.24 8.2.1 Red flags .24 8.2.2 Granularity .25 8.2.3 Assessment criteria .25 8.3 GHG targets.26 8.3.1 Red flags .26 8.3.2 Granularity .27 4 ATP-Col framework and guidance V1,September 2024 8.3.3 Assessment criteria .27 8.4 Decarbonisation levers and mitigation actions.30 8.4.1 Red flags .30 8.4.

13、2 Granularity .31 8.4.3 Assessment criteria .32 8.4.4 Additional assessment criteria for decarbonisation levers in specific sectors.34 8.5 Governance.35 8.5.1 Red flags .35 8.5.2 Granularity .36 8.5.3 Assessment criteria .36 8.6 Financial elements.37 8.6.1 Financial allocations to support the strate

14、gic ambition:CapEx and OpEx.38 8.6.2 Revenue and production.43 8.7 Engagement strategy.45 8.7.1 Red flags .45 8.7.2 Granularity .46 8.7.3 Assessment criteria .46 9.Transition plan categorization.49 Glossary.51 Appendix 1 Consensus areas among transition plan frameworks.55 Appendix 2 Mapping of discl

15、osure indicators and ATP-Col.60 Appendix 3 Locked-in emissions guidance.66 Appendix 4 External dependencies of transition plans,and addressing dependencies.71 Appendix 5 Category correspondence between ISO 14064-1(and 14064-4)and the GHG Protocol.75 Appendix 6 Guidance on climate governance assessme

16、nt criteria.77 Appendix 7 Guidance on engagement assessment criteria.81 Appendix 8 ATP-Col members.87 5 ATP-Col framework and guidance V1,September 2024 1.Executive summary A credible and robust transition plan is undeniably a key tool to render the international decarbonisation challenge into a com

17、panys operational roadmap and make its activities compatible with the low-carbon requirements that will contribute to decarbonising the global economy.All the recent companys transition plan disclosure frameworks and guidance tend to a consensual definition and description of the elements(Figure 1)o

18、f such plan as described in section 4,supporting the transparency and quality of the data disclosed by companies.However,there is an increasing number of assessment methods and tools appearing on the market,which risks confusion for users,including companies themselves.Figure 1:High-level elements o

19、f a companys transition plan Focusing on the decarbonisation aspects,this document draws on existing publicly available international documentation related to transition plans and expert opinions to present a credibility assessment process for transition plans.It additionally provides a basis for st

20、reamlining and harmonising these efforts worldwide.It can be used by assessors as well as those developing assessment methodologies to be more transparent regarding their practices.This document defines a credible transition plan as a one aligned with international decarbonisation goals,consistent w

21、ith relevant sectoral and local transition plans where the company operates(see section 5 and appendix 4),and feasible within its proposed timeline.The credibility assessment framework presented in section 7 relies on principles described in section 6 that assessors should use when carrying out tran

22、sition plan assessments:Relevance,transparency and completeness Ambition and feasibility Consistency Long term value and just transition Designed to remain neutral regarding the existing voluntary and regulatory climate disclosure frameworks,it proposes four steps to holistically assess the credibil

23、ity of a companys transition plan:1.Checking the compliance with selected disclosure framework(e.g ESRS,GFANZ,IFRS,TPT)2.Checking potential red flags 3.Checking the granularity of the data 4.Checking the overall credibility with assessment criteria Metrics and targetsImplementation strategyGovernanc

24、eEngagement strategyStrategic ambition 6 ATP-Col framework and guidance V1,September 2024 In section 8,the document proposes a list of 43 red flags and 50 assessment criteria linked to transition plan elements.Transition plan element Assessment criteria Strategic ambition 4 Metrics and targets 12 Im

25、plementation strategy 18 Governance 7 Engagement strategy 9 Table 1:Assessments criteria and transition plan elements Those assessment criteria and red flags are aggregated under the following six assessment items that are usable with most of the climate disclosure frameworks referred in this docume

26、nt:Companys GHG accounting and performance GHG targets Decarbonisation levers and mitigation actions,plus locked-in emissions Financial elements,including expenditure allocations and revenue/production Engagement strategy Governance While this document tries to remain as sector-agnostic as possible,

27、some assessment criteria are intrinsically sector-sensitive.When it was not possible to do otherwise,some notes identified with icons such as (fossil fuels),(coal power generation),(industrial hard to abate sectors)(financial)bring in sectoral perspectives/nuances.Nevertheless,these require further

28、sectoral and technical specifications that are not provided in this document.As far as possible,assessment criteria integrate icons for consistency,feasibility,risk,and ambition,to indicate the perspective that criteria can provide the assessor when looking at the companys transition plan.The assess

29、ment process and the summation of the assessment items,consideration assessment criteria and red flags outlined in this document should provide the assessor with a strong basis to arrive at a well-founded judgement of the credibility of a companys transition plan and its transition readiness as prop

30、osed in section 9.Figure 2:Categorisation of companys transition plan readiness and transition plan credibility This document may not reflect the current practices and reality of things,but more the ideal case where all the data is available at the relevant granularity that fits with the purpose of

31、the assessment,especially regarding the use of national and sectoral transition plans.Although it may not be possible to assess all assessment criteria at this time,assessor should tend to address them fully.Company not aligned or not transitioning Company committed,pledged or aiming to transition C

32、ompany aligning or in process of aligning Company aligned or transitioning in a credible way 7 ATP-Col framework and guidance V1,September 2024 2.Document scope Greenhouse gases(GHG)emissions continue to increase,even as the window to limit climate change to 1.5C with limited overshoot by the end of

33、 the 21st century is closing.Since COP21 and the Paris Agreement,companies,and more globally speaking non-state actors,are recognised as key players in achieving the international challenge to decarbonise the global economy.Nevertheless,even as more and more companies are setting GHG reduction targe

34、ts1,only a few have defined and implemented credible transition plans to reach them2.A credible and robust transition plan is undeniably a key tool to render the international decarbonisation challenge into a companys operational roadmap and make its activities compatible with the low-carbon require

35、ments that will contribute to decarbonising the global economy.Both voluntary and mandatory climate disclosure frameworks,standards and regulations have emerged since COP26.These disclosure schemes are critical for transparency and corporate climate accountability.Regardless,a companys transition pl

36、an should not just be seen as a reporting exercise but as a steering and monitoring tool for transition.There is still a need to go beyond reporting compliance exercises and provide guidance to help relevant stakeholders assess and understand the credibility of companies transition plans.Accountabil

37、ity cannot be limited as merely a duty to fulfil reporting requirements.The goal of this document is to provide a coherent and harmonised framework for assessors to gauge the credibility of a companys transition plan.It is based on existing guidance and guidelines3,standards and disclosure framework

38、s4,and assessment methods5 for companies transition plans but also transition plan expert opinions.Additionally,the document seeks to define how to identify relevant sectoral transition plans that contain credible decarbonisation pathways and levers to provide rigour and clarity to market actors.Thi

39、s document draws on existing publicly available international documentation,related to transition plans to present a credibility assessment process for transition plans and provide a basis streamlining and harmonising these efforts worldwide.It can be used by assessors as well as those developing as

40、sessment methodologies to be more transparent regarding their practices.The primary target audience for this guidance document are assessors and/or analysts6 who want to go beyond simply verifying a companys reporting compliance with existing or upcoming disclosure frameworks and to assess the credi

41、bility of its transition plan.The framework and guidance in this document can also be used by transition plan preparers to better understand how third-party assessors will analyse their transition plans.This document does not include competency requirements for assessor,but accreditors bodies are en

42、couraged to develop some based on it.The framework and guidance in this document focus on the decarbonisation aspect of a transition plan;they do not cover nature or just transition aspects despite these being key components of a companys 1 See for instance https:/sciencebasedtargets.org/target-dash

43、board or https:/ 2 See for instance the assessments done by CA100+s net zero company benchmark,New Climate Institutes Corporate Climate Responsibility Monitor,TransitionArc plateform,Transition Pathway Initiative,World Benchmarking Alliances climate and energy benchmarks(using ACT Initiative)3 Such

44、as in alphabetic order:CDP technical note on climate transition plan,Climate Bonds guidance on transition plan,CERES Climate transition action plans,HLEG integrated matters and associated criteria,ISO Net Zero Guidelines,Race to Zero criteria 4 Such as:EU ESRS E1,GFANZ Expectations for real-economy

45、transitions plans,IFRS S2,UK TPT Disclosure Framework,TCFD 5 Such as:ACT Initiative,Climate Action 100+,Climate Bonds Initiative Standard V4.0,New Climate Institutes CCRM,Transition Pathways Initiative 6 The document uses indifferently the terms assessor or analyst to define a person who assess the

46、credibility of a companys transition plan,it could be verifier,consultant,auditor,ESG analyst,or even internal auditor of a company who wants to assess the credibility of the companys transition plan before publication 8 ATP-Col framework and guidance V1,September 2024 transition plan.Likewise,this

47、document does not cover adaptation to climate change effects as it would necessitate a dedicated one to assess the credibility of companies adaptation plan7.Lastly,this guidance document remains neutral to transition plan disclosure policies and frameworks and can be used along with any existing tra

48、nsition plan disclosure framework.ATP-Col members acknowledge that the topic of transition plan assessments is a growing one.As expertise on transition plans continues to expand in the future,further effort will be necessary to update and share this knowledge with the community on this subject.3.Int

49、roduction to transition plans The past decade has seen the international community push for stronger development of green finance and corporate sustainability and accountability mechanism in the context of the accelerating environmental crises.This is true in different regions of the world that have

50、 developed their own legislative vehicles and incentive schemes to drive the green transition8.One key dimension currently gaining traction in the push for a green economy is that of transition finance and transition plans.Transition finance concerns businesses or activities that are not yet net zer

51、o,but that are planning and implementing a transition to net zero.Many economic actors are planning their transition to get their business strategy on track with pursuing efforts to limit global temperature to 1.5C above pre-industrial levels by the end of 21st century9.These transition plans set th

52、e objectives and associated means for the successful transition of a companys activities,and generally seek to inform the companys stakeholders about its roadmap,including the decarbonisation levers,governance and engagement strategy that it must implement in order to reach its net-zero targets and

53、manage climate-related risks(transition,physical,litigation).In addition to the decarbonisation aspects,most related disclosure frameworks and guidance are currently giving priority to including climate change adaptation,nature and just transition components in companies transition plans.It is cruci

54、al that companies develop these transition plans to induce change within their business models,with clear pathways towards the achievement of the Paris Agreement and other initiatives,such as the Kunming-Montreal Global Biodiversity Framework or the International Labor Organizations(ILO)Guidelines f

55、or a just transition towards environmentally sustainable economies and societies for all.In recent times,there has been a proliferation of proposed frameworks,regulations and assessment schemes addressing the key components of credible transition plans.There is a high level of commonality in these i

56、n terms of shared principles and structures.But there is still significant diversity in the granular 7 See for instance ACT Adaptation methodology,ACT Initiative,October 2023.8 For instance:The European Commission developed its Sustainable Finance Strategy in the frame of the European Green Deal,mea

57、nt to guide the push to net-zero in the region.In parallel,China has announced an ambition to reach net-zero by 2060 and developed tools to impulse the movement towards this objective(Green Bond Endorsed Project Catalogue,for example).The United States have also followed suit,with a large-scale inve

58、stment program in the greening of its economy through the Inflation Reduction Act.Brazil is currently developing its Green Taxonomy and creating laws to fight deforestation in the Amazon more effectively.Different countries on the African continent are also implementing legislation to regulate natur

59、al resources use and guide the energy transition,as can be seen in Egypt,Ghana or Kenya 9 Given that warming outcomes are assessed probabilistically,a fair chance at 1.5C is the same thing as well below 2C.This is why the Paris Agreement refers to long-term temperature goal in the singular and sets

60、out the goal as:“Holding the increase in the global average temperature to well below 2C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5C”.This is because the estimated carbon budget for a 50%chance at 1.5C is approximately the same as the carbon budget for

61、a 83%chance at 1.7C and for a 83%chance at 2C(see IPCC AR6 WGI Fig.SPM.2 at D.1.2).Conversely,note that aiming for even an 83%chance at 2C,is only a 17%chance at 1.5C which does not constitute“pursuing efforts”.9 ATP-Col framework and guidance V1,September 2024 details underpinning them10 as well as

62、 assessment practices.While international efforts have been made with regulations and interoperable voluntary norms to enhance the quality of companies transition plans,there is still a need for international standardising around transition plan assessment approaches so that they can be used to make

63、 coherent and comparable assessments regardless of which framework has guided the transition plan development.4.Company transition plan content and use cases 4.1 Definition of a transition plan The transition plan reflects the transition planning dynamic exercise of the company11.Based on existing g

64、uidance and guidelines12,standards and disclosure frameworks13,as well as assessment methods14,a transition plan can be defined as an aspect of a companys overall long-term strategy that lays out a set of short-,mid-and long-term targets,actions and resources,with accountability mechanisms,to align

65、the companys business activities with a net-zero GHG emissions pathway that delivers real-economy emissions reductions with the objective of limiting global warming to 1.5C and minimising the companys systemic climate transition risks.4.2 Transition plan elements A transition plan should be made pub

66、licly available in a comprehensive document.This contains annually updated,clear and material information on a companys key performance indicators(KPIs),ambition and performance targets,chosen science aligned pathways,detailed implementation plan with identified challenges and potential barriers to

67、tackle and how to overcome them,financing plan,internal governance structure and external disclosure regime.Progress reports against the transition plan are usually linked and available on the same website.The content of companies transition plans may vary depending on the disclosure framework used.

68、Maintaining neutrality to different disclosure frameworks,ATP-Col members have consensually agreed and set out certain high-level elements that should structure a companys transition plan:Strategic ambition15 This comprises the companys objectives and priorities for responding and contributing to th

69、e transition towards low-GHG emissions and a climate-resilient economy.It sets out whether and how the company is pursuing these objectives and priorities,including whether it is doing this in a manner that captures opportunities,avoids adverse impacts for stakeholders and society,and safeguards the

70、 natural environment.The strategic ambition enables an understanding of the companys past,current and future mitigation efforts to ensure that its strategy and business model are compatible with the transition to a sustainable economy and with limiting global 10 See for instance“Transition Finance M

71、apping:Frameworks to assess corporate transition”Climate Bonds Initiative,November 2023 and Appendix 1.11 See for instance Transition Planning Cycle,Transition Plan Taskforce,April 2024,or ACT Step by Step Methodology,Version 1,April 2021,ACT Initiative.12 See for instance:CDP Technical Note:Reporti

72、ng on Climate Transition Plans,CBI Guidance to Assess Transition Plans,CERES Climate Transition Action Plans,HLEG integrated matters and associated criteria,ISO Net Zero Guidelines,OECD Guidance on Transition Finance,Race to Zero Criteria.13 See for instance:EU ESRS E1 Climate Change,GFANZ Expectati

73、ons for Real-economy Transitions Plans,IFRS S2 Climate-related Disclosures,UK TPT Disclosure Framework,TCFD.14 See for instance:ACT Initiative,Climate Action 100+,CBI Standard V4.0,New Climate Institutes CCRM,Transition Pathways Initiative.15 This element is also named foundation in some transition

74、plan disclosure documents.10 ATP-Col framework and guidance V1,September 2024 warming to 1.5C.Under this element,a company should also disclose the high-level implications that its transition plan will have on its business model and value chain,as well as the key assumptions and external factors on

75、which the plan depends.16 Metrics and targets These include all the metrics and targets that the company is using to drive and monitor progress towards its strategic ambition16.When stating these metrics and targets,the companys transition plan should include a qualitative assessment of the potentia

76、l locked-in GHG emissions from the companys key assets and products.It should also include an explanation of whether and how these emissions may jeopardise the achievement of the companys GHG emissions reduction targets and drive transition risk and,if applicable,an explanation of the companys plans

77、 to manage its GHG-intensive and energy-intensive assets and products.Implementation strategy This covers the actions the company is taking within its business operations,products and services,and policies and conditions to achieve its strategic ambition.It should also include an explanation and qua

78、ntification of the investments and funding supporting the companys implementation of its transition plan and the resulting implications for its financial position,financial performance and cash flows16.Referencing its GHG emissions reduction targets and the climate change mitigation actions,the comp

79、any should include an explanation of the decarbonisation levers identified and key actions planned,including changes in its product and service portfolio and the adoption of new technologies in its own operations or upstream and downstream in its value chain.Engagement strategy This includes a descr

80、iption of the companys engagement with its value chain,industry peers,government,public sector,communities and civil society in order to achieve its strategic ambition16.Governance This comprises an explanation regarding how the company is embedding its transition plan within its governance structur

81、es and organisational arrangements in order to achieve the strategic ambition of its transition plan16.For instance,whether the companys transition plan is approved by its administrative,management and supervisory bodies.These five items consist of the common high-level elements of a companys transi

82、tion plan that are present at a minimum in all climate disclosure frameworks,standards,guidance and assessment methods,though they may be organised or named differently and include different levels of sub-elements.More details regarding sub-level elements and data points based on an academic paper b

83、y the University of Zurich and Oxford Sustainable Finance Group 17 are provided in appendix 1.16 Adapted from the UK TPT Disclosure Framework,October 2023,based on Expectations for Real-economy Transition Plans,GFANZ,September 2022.EU CSRD ESRS have also been used to frame the proposed high level el

84、ements.17 Net Zero Transition Plans:Red Flag Indicators to Assess Inconsistencies and Greenwashing;University of Zurich and Oxford Sustainable Finance Group,September 2023.11 ATP-Col framework and guidance V1,September 2024 4.3 Intended users of a transition plan and use cases A transition plan shou

85、ld first and foremost be used internally by the company as a tool to steer and monitor its transition towards a net-zero world in order to:i)prevent and reduce its climate-related risks,and ii)limit its impact on climate change and contribute to the global transition effort.The reporting dimension a

86、nd credibility assessment of a transition plan is a way to:i)inform and provide transparency to relevant stakeholders about the companys transition plan,and ii)follow up on a companys climate accountability.Use cases for transition plan credibility assessments can be,for instance,to:respect regulati

87、ons,inform government regarding the companys alignment with the national decarbonisation strategy,inform clients18 about the companys transition,inform shareholders regarding the companys transition,inform intergovernmental agencies regarding the companys transition,inform(public or private)funders

88、and investors when the company is looking for funding to support the transition,inform financial regulators regarding climate-related financial risk management,provide transparency to market actors regarding the companys transition,provide evidence to civil society regarding the credibility of the c

89、ompanys transition,provide proof to a judge when companies are sued for climate-related issues.Beyond the requirements and recommendations of transition plan disclosure frameworks,the assessor should note that the level of granularity needed in a specific part or all of the transition plan can vary

90、depending on the intended users and use cases(see for instance Table 2).Intended users outside the company can,for instance,be financial institutions(banks,insurers,investors),financial regulators,governments,intergovernmental organisations and judges,NGOs,and rating agencies and ESG analysts.Table

91、2:Examples of categories of transition plan use cases(NGFS19,May 2023)18 Clients can be companies(B2B),customers(B2C)or public authorities(public procurement).19 Stocktake on Financial Institutions Transition Plans and their Relevance to Micro-prudential Authorities,Network for Greening the Financia

92、l System(NGFS),May 2023.12 ATP-Col framework and guidance V1,September 2024 Some intended users may require access to further details,such as the precise breakdown of investments per asset in a specific region where the company operates or detailed impact on the workforce,while this information may

93、not be relevant for public disclosure because of its sensitivity.The following are other examples of such instances:A government that is about to provide public subsidy to a company to support the decarbonisation of a specific company asset may require granular financial information to make sure the

94、 subsidy supports a transition plan that would not be possible without public financial support,and that,for instance,the just transition aspect is duly integrated to protect the local workforce and communities.A bank that is about to provide a loan to a company may require granular information to m

95、anage its own risks or to design a transition-linked loan.A financial regulator may require detailed information for prudential or financial stability purposes.A group of shareholders may require more details regarding the investment plan of the company when its transition plan is submitted for appr

96、oval at the general assembly.4.4 Special case of enabling activities,climate solutions providers and transitioned activities The concept of a transition plan is generally associated with companies having activities highly reliant on GHG emissions(directly or indirectly)with high impact on climate ch

97、ange.As companies cannot magically shift to a low-carbon world,they need to implement transition plans to decarbonise their activities over a period of time,compatible with limiting global temperature rise to 1.5C by the end of the century.Nonetheless,transition plans are necessary for all kinds of

98、activities.There are companies,generally called enablers or climate solutions20 providers,with activities that support delivering and scaling green activities without having negative impacts on other environmental and social aspects,or that have an intrinsically low-carbon profile due to the nature

99、of their activities.Enablers and climate solutions providers will have to respond to the growing demand for their products to ensure the transition challenge is met.As a result,their gross absolute emissions will likely increase,while the intensity of their production will have to decrease at least

100、at the same pace as the decarbonisation of their sector or the overall economy.For such companies,its more relevant to assess how much they contribute to the transitions needs in physical units(or functional units)proportional to their market share and whether their production intensity decreases at

101、 a level similar to the decarbonisation of the sector.To illustrate this point,in the case of a wind turbines manufacturer,it is more relevant to:check if the capacities of the wind turbines produced by the company are aligned with the demand for wind turbine capacities required under a 1.5C scenari

102、o proportional to the companys market share,and to control that,for the same functional unit,the GHG intensity of the production of its wind turbines is decreasing at least at the same rate or more than the average emissions intensity reduction for the wind turbine production sector.There are also c

103、ompanies that have already transitioned due to an anticipated low-carbon transition in the past.Therefore,they overperform compared to relevant sectoral decarbonisation pathway(s)and their 20 Climate Solutions:Technologies,services,tools or social and behavioural changes that directly contribute to

104、the elimination,removal or reduction of real-economy GHG emissions or that directly support the expansion of these solutions.These solutions include scaling up zero-carbon alternatives to high-emitting activities a prerequisite to phasing out high-emitting assets as well as nature-based solutions an

105、d carbon removal technologies.This definition is adapted from The Nature Conservancy and proposed by GFANZ in the technical review note Scaling Transition Finance and Real-economy Decarbonization,December 2023.13 ATP-Col framework and guidance V1,September 2024 peers.In most cases,these companies wi

106、ll overperform compared to the thresholds set in green taxonomies as well.For companies that have already transitioned,it is more relevant to ensure that they do not increase their GHG emissions and that they conduct their activities while continuing to remain within their carbon budget.If they incr

107、ease their GHG emissions,they can only do it proportional to the potential increase in their market share and within their re-estimated carbon budget.5.Sectoral transition plan A companys transition plan should be built upon relevant sectoral transition plans related to the companys activities and l

108、ocations(see section 7.2)and take into consideration the physical and non-physical external dependencies(see appendix 4)on which its success relies on.5.1 Definition and content of sectoral transition plan A sectoral transition plan(STP)refers to what needs to happen to achieve a specific decarbonis

109、ation objective for a given sector.Some would call it a sectoral roadmap.It describes the technological levers for decarbonisation,as well as the optimal selection and sequencing of these levers,the expected level of GHG reduction,the necessary investments,the research and development(innovation)nee

110、ds and potential disruptive needs,as well as other external factors such as potential regulations and market changes,including demand reduction,that may influence the achievement of the decarbonisation objective of a sector,but also the changes related to the workforce of the sector.According to the

111、 project standard prEN 18074:Industrial decarbonization Requirements and guidelines for sectoral transition plans,under development by CEN CENELEC TC 467,a sectoral transition plan(STP)is defined as“a long-term(minimum 20-year projection)strategic plan elaborated in collaboration with interested par

112、ties setting out actionable measures to match a sectoral industry decarbonization objective”.In the context of this guidance document,the decarbonisation objective is to limit global warming to 1.5C by the end of the 21st century with no or limited overshoot.According to prEN 18074,an STP is defined

113、 for geographical and sectoral boundaries.It details the decarbonisation scenarios over a timeframe of at least 20 years,with interim targets every five years.The STP includes at least two scenarios,with at least two reaching the decarbonisation objective.The STP may explore other scenarios(see sect

114、ion 5.2 below)to expose the different transition pathways for the sector.5.2 Selection of scenarios A scenario comprises projections of what can happen by creating plausible,coherent and internally consistent descriptions of possible futures.Scenarios are not predictions for the future.A scenario is

115、 the coupling of three elements:1.Transition universe The transition universe is an aggregation of all the assumptions made regarding future developments of exogenous factors.This includes,but is not limited to,market assumptions(future demand for products,commercial policies,trade regulations,etc.)

116、,technological assumptions(innovation and new implemented technologies,technology costs and/or energy consumption,etc.),policies of interested parties(regulations,industrial commercial planning and business models,civil society opinions,infrastructure,etc.)or resource availability(energy,raw and rec

117、ycled material availability,etc.).Each transition universe is specific to a given scenario,and strongly influences both the associated technological and market pathways described below.Further,each 14 ATP-Col framework and guidance V1,September 2024 transition universe is internally coherent and ref

118、lects a possible,albeit potentially biased,future.The qualitative and quantitative hypotheses composing the transition universe are described,documented and reported in the STP.2.Technological pathway The technological pathway describes,documents and reports the deployment modalities of the decarbon

119、isation levers targeting each objective,namely:year of first implementation of a productive asset,deployment progression if the decarbonisation lever is not fully deployed in the first year,carbon intensity trajectory(per tonne of product or per functional unit of product)over the chosen time period

120、 following the implementation of the expected decarbonisation levers,investments plan associated with the implementation of the decarbonisation lever,including capital expenditure(CapEx)and/or updated operational expenditure(OpEx),uncertainties around each decarbonisation levers availability,maturit

121、y and deployment modalities,expressed at least qualitatively.3.Market pathway The production volumes are determined by the demand within or outside the geographical boundary,in conjunction with raw material and energy availability,competition outside the geographical boundary as well as trade regula

122、tions.The market pathway of the STP and the underlying hypotheses should be reported separately and should describe the envisioned developments in:production demand,including consumer behaviour and sufficiency trends trade outside the geographical boundary commercial balance level of circularity Acc

123、ordingly,any evolution in production is reflected in the sectoral emissions and can be fully considered a factor in reaching the decarbonisation objective.The market pathway should describe,at least qualitatively,uncertainties around the market development.Consensus is emerging on principles by whic

124、h to select appropriate scenarios to inform sectoral transition plans,such as limited carbon budgets,temperature overshoot and carbon sequestration assumptions.A recent OECD report21 sets out criteria for Paris-compliance as scenarios that aim for 1.5C with no or limited overshoot,maintain a high li

125、kelihood of staying below 2C,reach peak emissions early and achieve net-zero GHG emissions.It also provides a perspective on the feasibility of a scenarios socio-economic,policy,and particularly its technological assumptions,like an over-reliance on uncertain technologies like carbon dioxide removal

126、(CDR)and carbon capture and storage(CCS),including direct air carbon capture and storage(DACCS)and bioenergy with carbon capture and storage(BECCS).Aligning with ambitious and ideally multiple scenarios is needed in the face of high climate uncertainties.Assessors should note that not many scenarios

127、 currently used in transition planning meet these stringent criteria.In complement to general elements described above,the following criteria,based on Climate Bonds Initiative and GFANZ22,can be used to help selecting a credible science-based benchmark:1.It is consistent with a carbon budget that li

128、mits the global mean temperature rise to 1.5C with a 50%probability with low or no overshoot;21 Paris-consistent climate change mitigation scenarios:A framework for emissions pathway classification in line with global mitigation objectives,Environment Working Paper No.222,OECD,September 2023.22 Guid

129、ance on Use of Sectoral Pathways for Financial Institutions,GFANZ,June 2022.15 ATP-Col framework and guidance V1,September 2024 2.It may be global or regional but in either case it has been derived from and is consistent with climate modelling where the global carbon budget is allocated across time

130、and to different regions and sectors typically via an Integrated Assessment Model.For example,derived from IEA climate scenarios;3.Ideally it is sector specific.If it is not sector specific only the SBTis Cross Sectoral Pathway is recognised under these principles and use of that benchmark is subjec

131、t to the guidance set by SBTi;4.It includes all material scopes and types of emissions for that sector/activity 5.It covers the full timeline to net zero/to only residual emissions,as long as any residual emissions are clearly identified;6.It does not incorporate the use of offsets i.e.,it does not

132、assume the corporate will need to use offsets to meet the benchmark;7.If the benchmark uses emissions intensity metrics,these may be product or physical emissions intensity only(e.g.tCO2e/tonne of cement)not economic intensity(e.g.cCO2e/$revenue).If it uses absolute emissions,the benchmark should on

133、ly go down over time,never up;8.It has been produced by an independent third party,not by the corporate themselves,with climate science expert input to the process and has been subject to public review;9.Its technical documentation confirms that it meets principles 1-7 The assessor should check that

134、 the scenarios used by the company to frame its transition plan meet the above criteria.5.3 Use of the sectoral transition plan As outlined by GFANZ,sectoral pathways can be hugely valuable for transition plan assessors as they“provide the link between the science of the remaining carbon budget and

135、the detailed steps that a specific sector could take to reduce GHG emissions to a particular level in a specified timeframe22.”They can inform the following elements of a companys transition plan:High-level strategy,risks and opportunities Target-setting,at entity and portfolio levels Implementation

136、 strategy,including technology choices,capital allocation and investments needs,collaboration opportunities,innovation and disruptive needs,demand change and public policy needs There is huge variation between sectors when it comes to choosing technology levers for decarbonisation,and the optimal se

137、lection and sequencing of these levers.For many hard-to-abate/energy-intensive sectors,such as heavy industries,the choice is challenging as not all the technologies are as yet available at the scale required.Other sectors,notably fossil fuels,must be rapidly phased out to give us the best chance of

138、 limiting global warming,as demonstrated by climate science.A credible transition plan for a company in these sectors would need to demonstrate steps to conscientiously wind down its workforce,communities and environmentally damaging physical infrastructure,potentially but not necessarily transition

139、ing to other sources of revenue.Given these sectoral variations,it can be helpful for an assessor to refer to existing guidance,particularly in the case of sectors for which the available transition options are less clear.According to IMF and World Bank,a credible transition plan should be grounded

140、in a credible sectoral plan or taxonomy.Each companys circumstances are different,but if its implementation strategy does not align at least at a high level with what is set out in the recognised sectoral transition plan most relevant to its situation,then this is an indication that its transition p

141、lan is likely not credible.16 ATP-Col framework and guidance V1,September 2024 The assessor should also bear in mind that sectoral transition pathways often have many dependencies(government policy,availability of capital,existence of infrastructure)and should consider these when assessing the perfo

142、rmance of a company against the pathway.A company may be doing everything that is reasonably expected of it but still falling short because of a systemic dependency beyond its own control(see appendix 4 and section).If a regional or national sectoral transition plan compliant with the definition in

143、section 5.1 or with a recognised taxonomy is available for reference,this is a valuable resource for transition plan assessment.Many reputable initiatives,business sector associations and governmental organisations have produced transition pathways23 or similar materials for companies to refer to wh

144、en developing their transition plans.There is also much guidance available on the most appropriate technology solutions for each sector,e.g.IPCCs Global Warming of 1.5C report.Assessors should familiarise themselves with these materials to inform their assessments.Sector-specific transition plan ass

145、essment guidance There is a growing body of sector-specific transition plan assessment guidance for assessors developed(or under development)by different sources,including the Accelerate Climate Transition(ACT)initiative,Climate Bonds Initiative(CBI),Climate Action(CA)100+,European Financial Reporti

146、ng Advisory Group(EFRAG),Institutional Investors Group on Climate Change(IIGCC),Oxford Transition Finance Centre of Excellence,Rocky Mountain Institute Center for Climate-Aligned Finance,Science Based Targets initiative(SBTi),UK Transition Plan Taskforce(TPT)sector guidance,etc.These materials from

147、reputable organisations are designed to equip companies,investors and other transition plan assessors with guidance to ask the right questions to test the credibility of a corporate strategy,particularly regarding technology and investment choices and actions to reduce emissions.This level of inform

148、ation,previously not commonly disclosed,is now a critical component of a transition plan,which an assessor needs to focus on to determine the companys transition credibility.5.4 Regional considerations There are not yet many regions or countries with specific regional decarbonisation pathways that p

149、rovide relevant sectoral transition plans with relevant granular data,which can be used by companies in their transition planning.This is partly due to the high effort and data availability required.Nevertheless,assessors are encouraged to refer to them wherever available as these are more reflectiv

150、e of the circumstances of the particular region in which an organisation is located and can be more readily compared against its transition plan and the decarbonisation levers it plans to implement(see section 8.4,Table 6,and appendix 4,Table 13).The additional granularity means that regional decarb

151、onisation pathways can provide even more prescriptive guidance when it comes to targets,implementation strategy,innovation,investment,and particularly engagement strategy.For large companies with operations in multiple geographies,not all of which will have country-specific pathways to refer to,asse

152、ssors should consider reviewing their transition plans against local as well as global pathways to get a sense of company performance in-country but also overall.Unfortunately,without an internationally agreed and adopted set of principles around credibility for sectoral transition plans,such as prE

153、N 18074,there is an inherent risk that country-specific guidance may be 23 For instance:the Leadership Group for Industry Transition(LEAD-IT)compiled existing materials for the heavy industries sector:https:/www.industrytransition.org;or A repository of sector-specific decarbonisation benchmarks inf

154、orming 1.5C-aligned corporate climate action.Version 1.0.New Climate Institute,April 2024,analyses several existing ones.17 ATP-Col framework and guidance V1,September 2024 influenced by local,vested interests.Its important then for assessors to consider the ownership of the guidance and how it was

155、developed.Moreover,given the importance of equitably assessing transition plans in a way that reflects regional challenges and opportunities,assessors should look(and advocate)for more credible country-specific or regional decarbonisation pathways and guidance on principles to fairly consider region

156、al nuance in their transition plan assessments.Note that there is no international alignment as yet on how to apportion things like the carbon budget fairly,and how the principle of Common but Differentiated Responsibilities and Respective Capabilities(CBDRRC)translates to country decarbonisation pa

157、thways and the transition plans of individual entities.6.Principles for assessment The application of principles when assessing companies transition plans is fundamental to ensuring that the related information is clear,fair,not misleading to intended users and,above all,creates confidence in the fe

158、asibility of the companys plan to transition in line with pursuing efforts to limit temperature increase to 1.5C9.The following principles should be used by assessors when carrying out transition plan assessments.6.1 Relevance,transparency and completeness The assessor ensures that the transition pl

159、an contains all of the relevant information related to the companys planned transition to net zero and contribution to a net-zero economy.The assessor ensures that the transition plan also shows an appropriate balance between relevant,verifiable qualitative and quantitative information and use text,

160、figures and graphical representations as appropriate.Further,the assessor ensures that the transition plan covers all of the companys material24 direct(scope 1)and indirect GHG emissions(scope 2+3)categories and detail its response to climate-related risks and opportunities as well as its contributi

161、on to an economy-wide transition.6.2 Ambition and feasibility The assessor ensures that the decarbonisation objective outlined in the transition plan is in line with pursuing efforts to limit temperature increase to 1.5C above pre-industrial levels by the end of 21st century as stated in the Paris A

162、greement.Further,the assessor ensures that the plan 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 long term.The assessor ensures that the companys decarbonisation levers,stated in the

163、 transition plan,are feasible to implement over different time horizons taking into account the assumptions used and the local context where the company operates.The feasibility of a transition plan depends both on factors within the companys internal control25 and external factors that are outside

164、the companys control.These two categories of factors can be referred to 24 Materiality should be defined from a quantity perspective as follows:at least 95%of scope 1 and 2 emissions should always be included.For companies with scope 3 emissions that are at least 30%of their total(scope 1,2 and 3)em

165、issions,at least 80%of scope 3 emissions should be included.This rule allows to capture at least+2/3 of total emissions in the worst configuration where scope 1+2 represent 71%of the total emissions and scope 3 represents 29%of total emissions.See also Figure 5 for sectors profiles.25 Depending on t

166、he structure of the company(horizontal or vertical integration,for instance),the influence of the company on specific factors can vary.18 ATP-Col framework and guidance V1,September 2024 as internal and external dependencies(see appendix 4 on external dependencies).The assessor should ensure that th

167、e plan adequately outlines these dependencies and ways to address them to demonstrate its feasibility.When assessing the credibility of the companys transition plan,the assessor should consider the local context(s)and the specifics of the business sector(s)in which the company operates.6.3 Consisten

168、cy The assessor ensures that all components of the plan are consistent with each other and with the overall decarbonisation ambition of the company and none contradicts or gets in the way of another part of the plan.6.4 Long-term value and just transition The assessor should ensure that the companys

169、 transition plan is designed to protect and enhance long-term value for stakeholders including workforces26,society,the economy and the natural environment on which the company depends,without having any significant foreseeable negative impacts on any environmental and societal objectives.Note that

170、the present document does not propose specific guidance to help assessor on this principle,as it would necessitate a dedicated report.7.Assessment framework 7.1 General challenges The challenge of the assessor is to ensure that the past,present and future mitigation actions of the company as well as

171、 its overall strategy and business model are compatible with its transition ambition and align with the global ambition to pursue the effort to limit temperature increase to 1.5C.To this end,it is helpful for the assessor to understand how transition plans fit into the wider system architecture as l

172、aid out in a recent report27 by IMF,World Bank and OECD.Corporate disclosure guidance or regulation can dictate transition plan availability and timing.Moreover,existing transition plan disclosure frameworks may determine the format used by a company in its transition plan to ensure quality and cons

173、istency.So,an assessor should be familiar with the latest standards applicable to transition plans,specifically those that are relevant to their locality.The definition of credibility in the context of a transition plan may be similar or related to other alignment tools like product certifications a

174、nd labels and due diligence standards and intertwined with local laws on related topics.This is the broader context in which a company may be disclosing its transition plan,and an assessor should be cognizant of this depending on their role,some assessors may also be tasked with assessing the compan

175、ys alignment against these other elements,or themselves required to demonstrate compliance with local accounting requirements.More importantly,a transition plan is informed by other system components,particularly local sectoral pathways,policies,regulations,technologies availabilities,markets change

176、s,carbon and energy price,green taxonomies The assessors will need to be familiar with how to interpret these elements and use them to 26 The plan should maximises positive economic,social,and decent work gains and minimises and mitigates negative impacts.27 Activating Alignment:Applying the G-20 Pr

177、inciples for Sustainable Finance Alignment with a Focus on Climate Change Mitigation;IMF,World Bank and OECD;September 2023.19 ATP-Col framework and guidance V1,September 2024 holistically assess transition plan content.They will likely need to ask for the judgement of sectoral experts,use existing

178、and upcoming external publications and rely on other specialists.The assessor should keep in mind that a companys transition plan,while it may be aligned with the average decarbonisation pathway at the global level,may not automatically be reciprocally aligned with the local sectoral pathway.Indeed,

179、considering the principle of equity and common but differentiated responsibilities and respective capabilities,in the light of different national circumstances28.Decarbonisation pathways at local levels may require more or less decarbonisation ambitions and actions than reflected in the global decar

180、bonisation pathway(see IEA or NGFS scenarios for different granularity,for instance).7.2 Concepts underlying transition plan credibility In general,the credibility of a companys transition plan may be interpreted or perceived differently from one person to another,sometimes leading to different expe

181、ctations such as:Compliance with transition plan disclosure requirements Climate risk management Alignment of ambition with international climate goals Consistency of the transition plan Feasibility of the transition plan Compliance with transition plan reporting standards and disclosure frameworks

182、is the starting point for assessing the credibility of a companys transition plan.However,just reporting the data required and recommended by most of the existing frameworks and standards is not enough.While the assessor will not be able to assess the credibility of the plan without this data,it onl

183、y constitutes the raw material that will feed the assessment process.Although a credible transition plan reduces a companys exposure and vulnerability to climate related risks(transition,physical,litigation),this document does not define the credibility of a transition plan through the lens of clima

184、te-related risk management and will not focus much on that dimension,but will flag assessment criteria that can be risk related(see section 8).This document defines the credibility of a companys transition plan as the triple consistency in:1.the overall decarbonisation ambition aligned with internat

185、ional objectives defined by the Paris Agreement(see section 8.3),2.the relevant sectoral transition plan(s)for the region(s)where the company operates,(see section 5),and 3.the implementation of feasible policies,mitigation actions and decarbonisation levers on time to deliver the strategic ambition

186、.Feasibility is dependent on internal and external factors that may be linked to local context(see appendix 4).Note 1:mitigation actions refer to:i)actions and action plans that are undertaken to ensure that the company delivers against targets set and through which it seeks to address material impa

187、cts,risks and opportunities;and ii)decisions to support these with financial,human or technological resources 28 The common but differentiated responsibilities and respective capabilities known as CBDR-RC principle was introduce in the UNFCCC article 3 paragraph 1 and article 4 paragraph 1 in 1992.2

188、0 ATP-Col framework and guidance V1,September 2024 Note 2:decarbonization levers are aggregated types of mitigation actions such as energy efficiency,electrification,fuel switching,use of renewable energy,products change,and supply-chain decarbonisation that fit with company specific actions.Note 3:

189、Local context refers to the region,country or even sub-jurisdiction where the company operates.Note 4:Internal factors on which the company depends on to deliver its transition plan are factors over which the company has increased control.These include factors such as organisational structure and ma

190、nagement responsibilities,which in turn form the basis of investment decisions(CapEx,OpEx,R&D),strategic business model orientation,workforce training,etc.Note 5:External factors on which the company depends on to deliver its transition plan are factors over which the company has reduced control.The

191、se include factors such as public policy or regulatory factors,economic factors,resource and infrastructure availability,public acceptance factors,etc(see appendix 4).To sum up,a credible transition plan is aligned with international decarbonisation goals,is consistent with relevant sectoral and loc

192、al transition plans where the company operates and is feasible within its proposed timeline.Figure 3:Credibility through overall consistency 7.3 Assessment process To assess the credibility of a companys transition plan,the assessor should follow a four-step process:1.Compliance check:The starting p

193、oint should be to check if the transition plan is compliant with the selected disclosure framework(e.g ESRS,GFANZ,IFRS,TPT).The plan qualifies as compliant if it contains all the disclosures required by the selected framework.Note that the present document does not provide guidance on this step as t

194、he compliance check would depend on the selected disclosure framework.2.Red flag check:Following the compliance check,the assessor should review the data disclosed by the company for red flags highlighted in this document.These red flags signal the assessor of a potential lack of completeness or bia

195、s in the transition plan that could undermine the credibility assessment.They signal areas where the assessor may need to probe the company further.Ambition with international objectivesInternal factorsRelevant sectoral and local transition plan(s)External factors 21 ATP-Col framework and guidance V

196、1,September 2024 3.Granularity check:The assessor should then proceed to check the inclusion of further granular information identified as necessary to perform a credibility assessment depending on the intended use of the transition plan.For example,to assess alignment with a decarbonisation pathway

197、 or dependencies on external factors,the assessor may need certain asset level disclosures that may not be required or recommended in the disclosure standards selected for compliance.These additional details may vary by sector too.Though the transition plan may qualify as complete if it contains all

198、 the disclosures needed for compliance,leaving out more granular information could call into question the credibility of the transition plan or could limit the scope of the assessment.4.Credibility check:Finally,the assessor should use the disclosed information as well as any specific external data

199、sources(e.g.the appropriate sectoral decarbonisation pathway for the locations where the company has assets)to go beyond box-ticking and assess the transition plans credibility on the basis of the assessment criteria set out in section 8 of this report.This step should be done holistically in order

200、to assess the consistency between the different aspects of the transition plan.If some aspects are judged as lacking credibility,the assessor should provide a qualitative assessment and recommendations on the basis of the guidance under section 8 of this report.Figure 4:Process for an assessor to fo

201、llow when assessing a Transition Plans credibility This document may not reflect the current practices and reality of things,but more the ideal case where all the data is available at the relevant granularity that fits with the purpose of the assessment,especially regarding the use of national and s

202、ectoral transition plans Although it may not be possible to assess all assessment criteria at this time,assessor should tend to address them.Compliance checkRefer to the selected transition plan disclosure framework e.g.financial metrics:Capital expenditure Green/red flag checkSee subsection onred f

203、lags in section 8 of this report e.g.financial metrics:Green CapEx refers to recognised/reputable taxonomy No figures regarding carbon intensive CapEx Granularity checkSee subsection on granularity in section 8 of this report e.g.five-year investment plan per technology per coutry per asset Credibil

204、ity checkSee subsection on assessment criteria in section 8 of this report pare disclosed investment with investment needs taking into consideration the current performance of the company and the location of assets 22 ATP-Col framework and guidance V1,September 2024 8.Assessment items,red flags and

205、assessment criteria In order to remain neutral regarding the existing climate disclosure frameworks(see section 5.1),this document proposes assessor to focus on the following credibility assessment items that are usable with most of the climate disclosure frameworks referred in this document:Company

206、s GHG accounting and performance GHG targets Decarbonisation levers and mitigation actions,plus locked-in emissions Financial elements,including expenditure allocations and revenue/production Engagement strategy Governance The assessment items in turn contain several red flags and assessment criteri

207、a,which are described in the following sections.As mentioned earlier,this document mainly focuses on the decarbonisation elements of a transition plan.While this document tries to remain as sector-agnostic as possible,some assessment criteria are intrinsically sector-sensitive.When it was not possib

208、le to do otherwise,some notes identified with icons such as (fossil fuels),(coal power generation),(industrial hard to abate sectors)(financial)bring in sectoral perspectives/nuances.Nevertheless,these require further sectoral and technical specifications that are not provided in this document.As fa

209、r as possible,assessment criteria integrate icons for consistency,feasibility,risk,and ambition,to indicate the perspective that criteria can provide the assessor when looking at the companys transition plan.8.1 Connection between transition plan content and assessment criteria As mentioned in secti

210、on 4.2,there are five common high-level elements that are present at a minimum in all climate disclosure frameworks,standards,guidance and assessment methods.The assessment criteria described in the following sub-sections are linked to those plans elements as sum up in the Table 3(more details with

211、other disclosure frameworks are given in appendix 2).Transition Plan elements Assessment criteria Strategic ambition GHG targets assessment criteria 2 GHG targets assessment criteria 3 Decarbonisation levers assessment criteria 4 Decarbonisation levers assessment criteria 5 Metrics and targets GHG a

212、ccounting assessment criteria 1 GHG accounting assessment criteria 2 GHG targets assessment criteria 1 GHG targets assessment criteria 4 GHG targets assessment criteria 5 23 ATP-Col framework and guidance V1,September 2024 Transition Plan elements Assessment criteria GHG targets assessment criteria

213、6 GHG targets assessment criteria 7 GHG targets assessment criteria 8 GHG targets assessment criteria 9 GHG targets assessment criteria 10 Locked-in emissions assessment criteria 1 Locked-in emissions assessment criteria 2 Implementation strategy Decarbonisation levers assessment criteria 1 Decarbon

214、isation levers assessment criteria 2 Decarbonisation levers assessment criteria 3 Decarbonisation levers assessment criteria 6 Decarbonisation levers assessment criteria 7 Decarbonisation levers assessment criteria 8 Decarbonisation levers assessment criteria 9 Financial allocation assessment criter

215、ia 1 Financial allocation assessment criteria 2 Financial allocation assessment criteria 3 Financial allocation assessment criteria 4 Financial allocation assessment criteria 5 Financial allocation assessment criteria 6 Revenue/production assessment criteria 1 Revenue/production assessment criteria

216、2 Revenue/production assessment criteria 3 Revenue/production assessment criteria 4 Revenue/production assessment criteria 5 Engagement strategy Government engagement assessment criteria 1 Government engagement assessment criteria 2 Peer engagement assessment criteria 1 Peer engagement assessment cr

217、iteria 2 Peer engagement assessment criteria 3 Supplier engagement assessment criteria 1 Supplier engagement assessment criteria 2 Client engagement assessment criteria 1 24 ATP-Col framework and guidance V1,September 2024 Table 3:Transition plan elements and assessment criteria 8.2 Companys GHG acc

218、ounting and performance A companys GHG performance forms the foundation for its transition plan.If this indicator is not based on relevant international standards and rules for GHG accounting or excludes substantial information,it can mislead the company itself and lead to an irrelevant,incomplete a

219、nd misleading transition plan.8.2.1 Red flags The companys GHG inventory does not follow the rules of international GHG accounting standards such as ISO 14064-1 or the GHG Protocol29.The companys GHG inventory does not cover relevant and material GHG emissions categories(see Figure 5:for overall sec

220、toral profiles),or the company doesnt provide any details regarding the exclusion of GHG emissions categories30.Materiality should be defined from a quantity perspective as follows:at least 95%of scope 1 and 2 emissions should always be included.For companies with scope 3 emissions that are at least

221、 30%of their total(scope 1,2 and 3)emissions,at least 80%of scope 3 emissions should be included.This rule allows to capture at least+2/3 of total emissions in the worst configuration where scope 1+2 represent 71%of the total emissions and scope 3 represents 29%of total emissions.Direct emissions ar

222、e only reported as total aggregated carbon dioxide equivalent(CO2e)figures instead of being quantified and reported separately for carbon dioxide(CO2),methane(CH4),nitrous oxide(N2O),nitrogen trifluoride(NF3),sulphur hexafluoride(SF6)and other appropriate GHG groups(hydrofluorocarbons,perfluorochemi

223、cals,etc.)in tonnes of CO2e.29 A correspondence table between ISO 14064-1:2018,the GHG Protocol Accounting Standard(2004)and the Corporate Value Chain(Scope 3)Standard(2011)is provided in appendix 5.30 See ISO 14064-1:2018:The organization shall apply and document a process to determine which indire

224、ct emissions to include in its GHG inventory.As part of this process,the organization shall define and explain its own pre-determined criteria for significance of indirect emissions,considering the intended use of the GHG inventory.Whatever the intended use is,criteria should not be used to exclude

225、substantial quantities of indirect emissions or evade compliance obligations.ISO 14064-1:2018 Appendix H regarding how to identify significant indirect emissions.Note that according to ISO 14064-1:“As part of this process,the organization shall define and explain its own pre-determined criteria for

226、significance of indirect emissions,considering the intended use of the GHG inventory.Whatever the intended use is,criteria should not be used to exclude substantial quantities of indirect emissions or evade compliance obligations.Using those criteria,the organization shall identify and evaluate its

227、indirect GHG emissions,to select the significant ones.The organization shall quantify and report these significant emissions.Exclusions of significant indirect emissions shall be justified”.Transition Plan elements Assessment criteria Client engagement assessment criteria 2 Governance Governance ass

228、essment criteria 1 Governance assessment criteria 2 Governance assessment criteria 3 Governance assessment criteria 4 Governance assessment criteria 5 Governance assessment criteria 6 Governance assessment criteria 7 25 ATP-Col framework and guidance V1,September 2024 For large companies,GHG invento

229、ry has not been verified or validated by a third party31 or the third party has expressed concerns regarding the quality of the GHG report.Carbon credits are not reported separately as required by international GHG accounting standards such as ISO 14064-1 or the GHG Protocol.Figure 5:High-level pers

230、pective of scope 1,2 and 3 GHG emissions for different sectors(source CDP32)8.2.2 Granularity The location of a companys activities bears an important link with how GHG reduction targets should be set(see section 8.3).To this end,the assessor may need to access the companys GHG disclosure disaggrega

231、ted by activities,by countries where the company operates,and by emission sub-categories.8.2.3 Assessment criteria The assessor should not carry out an assessment of the companys GHG accounting while there are already verification schemes that have existed for years.For large companies,GHG inventory

232、 should be verified or validated by an independent third party31 against recognised international GHG accounting standards such as ISO 14064-1 or the GHG Protocol.GHG accounting assessment criteria 1:The assessor should ensure that the GHG figures provided by the company have been verified or valida

233、ted in accordance with recognised international standards such as ISO 14064-1 or the GHG Protocol.GHG accounting assessment criteria 2:If no independent verification or validation has been done,the assessor should ensure that the company discloses,at the least,the relevant GHG emissions categories d

234、epending on its activities.Note 1:The assessor can refer to the CDP Technical Note:Relevance of Scope 3 Categories by Sector32(see Figure 5:)or any relevant and trusted existing GHG accounting sectoral guidance or standard(see,for instance,the ISO 19694 series related to energy-intensive industries,

235、GHG sector-specific tool or guidance approved by the GHG protocol,ADEMEs sector guidebooks)or existing life cycle analysis for the sectors products focusing on climate change impact.31 For the largest companies or defined as public interest entities,third party should be accredited according to ISO

236、14065,ISO 17029,ISAE 3000,or ISAE 3410.32CDP Technical Note:Relevance of Scope 3 Categories by Sector,CDP,April 2022.Scope 3 30%26 ATP-Col framework and guidance V1,September 2024 Note 2:The assessor should pay attention to the fact that despite third party verification or validation,the companys GH

237、G inventory could still miss significant shares of emissions along the value chain33.8.3 GHG targets GHG reduction targets serve as the compass to drive the strategic ambition of the companys transition plan.Their scope and alignment with science are critical and need to be assessed in order to appr

238、eciate the credibility of the companys transition plan.Though this section only focuses on GHG reduction targets,note that companies can also set other non-GHG emissions targets,such as increasing renewable energy capacity,phasing out fossil fuels or financial targets.These are not addressed in this

239、 section as they are considered in this guidance more as decarbonisation levers or mitigation actions and objectives that the company schedules to achieve its strategic ambition.Moreover,the assessor should note that for financial institutions,there are other relevant targets related to transition p

240、lans that should be considered but not covered in this document.8.3.1 Red flags There is no reference to the underlying climate scenario used for target setting,or the scenario used is not that of 1.5C with no or limited overshoot.Note 1:The European Commission states34:“When using scenarios or path

241、ways,it is recommended to use those that are science-based,and in the case of decarbonisation pathways,those that are in line with the Paris Agreement,such as the 1.5C scenarios of the International Energy Agency or the International Panel on Climate Change with no or limited overshoot”.Note 2:HLEG

242、Recommendation 4 states:“transition plan must reference credible sector pathways consistent with limiting warming to 1.5C with no or limited overshoot(e.g.IPCC,IEA,Network for Greening the Financial System(NGFS),One Earth Climate Model(OECM)and explain any material difference between the nonstate ac

243、tors transition plan and sector pathways”.There is only one long-term GHG reduction target.Note:Long-term constitutes a period of more than 20 years from the baseline year.There are no intermediary targets or the existing intermediary targets exceed are not aligned with accepted recommendations or d

244、ont take into consideration the lifespan of assets.Note 1:The commonly accepted recommendation is to set interim targets for 5 to 10 years till 2050.Note 2:No interim targets exceeding 10 years should be accepted Targets are only provided in relation to emissions intensity reduction.Note:Gross GHG e

245、missions reduction targets may be expressed in relevant intensity values(physical or economic units).Nevertheless,caution should be used when interpreting emissions intensity expressed as economic value in sectors characterised by volatile prices,i.e.physical units to express emissions intensity sho

246、uld be preferred where possible.Targets do not cover the relevant company activities.Targets do not cover all relevant GHG emissions categories.33 Oil companies in disguise:On a ticking carbon bomb called Scope 3 emissions mandatory reporting.And why investors should avoid car stocks and cars ESG ra

247、tings,Transport&Environment,September 2022.34 Commission Recommendation(EU)2023/1425 of 27 June 2023 on facilitating finance for the transition to a sustainable economy.27 ATP-Col framework and guidance V1,September 2024 Note:Depending on if capital goods associated emissions are amortized over time

248、 or not,this category generates potential peaks of emissions that can be excluded from the target coverage.Target do not cover all relevant GHGs.The targets do not follow from a baseline year or the baseline used is too dated(more than five years old,for instance).Targets do not cover gross GHG redu

249、ctions but include avoided emissions,energy attribute certificates(EACs)35 or carbon credits with no or limited explanation.Note 1:For better understanding of renewable electricity procurement,the assessor can read section 3.2 on renewable electricity procurement of the Corporate Climate Responsibil

250、ity36 methodology,and section 3:Renewable electricity procurement:innovative leadership and cheap claims of the Corporate Climate Responsibility Monitor(CCRM)202437.Some EACs are attached to physical and virtual Power Purchase Agreements(PPAs),meaning they are bundled and traceable to a unique renew

251、able project.As such they are considered additional as they enable this project to be financed and to exist Note 2:For better understanding of current limitations to the use of carbon credits,the assessor can read section 4.2 on offsetting claims of the Corporate Climate Responsibility methodology.8

252、.3.2 Granularity Ideally,all information related to GHG reduction targets in the transition plan should be disaggregated by activities and by country where the company operates in order to allow the assessor to ensure the consistency of these targets with relevant local sectoral decarbonisation plan

253、s.In all cases,the company should explain the method used to set these targets,any sectoral decarbonisation plans used and how it has used them to shape its decarbonisation trajectory in the areas where it operates.8.3.3 Assessment criteria GHG targets assessment criteria 1:The assessor should ensur

254、e that the targets cover all relevant direct and indirect GHG emissions(scope 1,2 and 3)in coherence with the companys GHG inventory(see section 8.2).If substantial quantities of GHG emissions are missing from the targets without any explanation or justification,the target coverage cannot be conside

255、red credible.Note:Consistent with the note mentioned in section 8.2.1 on red flags in relation to GHG accounting and performance,more than 5%of scope 1 and 2 emissions missing from the target qualifies as a substantial quantity.For companies with scope 3 emissions that are at least 30%of total(scope

256、 1,2 and 3)emissions,more than 80%of scope 3 emissions missing from the target qualifies as a substantial quantity.GHG targets assessment criteria 2:The assessors should check the 1.5C ambition of the companys selected decarbonization pathway(s)to set its targets(see also section 5 and independent s

257、tudies38).GHG targets assessment criteria 3:The assessor should consider whether the companys selected decarbonisation pathways are appropriate to its activities and their locations(see also section 5).35 Renewable energy certificates threaten the integrity of corporate science-based targets,Anders

258、Bjrn et al.,June 2022.36 Corporate Climate Responsibility,Guidance and assessment criteria Version 4.0,New Climate Institute&Carbon Market Watch,April 2024.37 Corporate Climate Responsibility Monitor,New Climate Institute&Carbon Market Watch,April 2024.38 Such as:Paris-consistent climate change miti

259、gation scenarios:A framework for emissions pathway classification in line with global mitigation objectives,Environment Working Paper No.222,OECD,September 2023.A repository of sector-specific decarbonisation benchmarks informing 1.5C-aligned corporate climate action.Version 1.0.New Climate Institut

260、e,April 2024 28 ATP-Col framework and guidance V1,September 2024 GHG targets assessment criteria 4:The assessor should check the alignment of the companys targets with its selected decarbonisation pathways(see also section 5).Note:There are different ways and methods to set and to assess target alig

261、nment with the decarbonisation pathways.The assessor should be aware of the existing approaches and should select one(s)that is/are most appropriate to the use cases of the assessment.For instance,the assessor can:rely on independent third-party GHG reduction target validation or other trusted GHG r

262、eduction target certification scheme,being aware of the limits and different between such certification schemes compare the theoretical ideal target considering parameters such as sectoral decarbonisation pathways/benchmarks,the companys current GHG performance,its market share and its forecasted fu

263、ture activities by the year of the target(see illustrative example in Figure 6 and see formulae such as the ones described in appendix D of ISO 14097:2021,also on open access in the Paris Agreement Capital Transition Assessment(PACTA)methodology39),or compare company decarbonisation rate/speed with

264、the annual average decarbonisation rate that the economy should follow(see example in Figure 7 and Table 4)Figure 6:Illustrative target misalignment(adapted from ACT generic V2)39 PACTA:Paris Agreement Capital Transition Assessment.See section 2 of PACTA for Banks Methodology Document,V1.2.2,July 20

265、22,Rocky Mountain Institute|2Investing Initiative.29 ATP-Col framework and guidance V1,September 2024 Figure 7:Illustrative decarbonisation rate from the climate law(Exponential Roadmap,1.5C business playbook,version3)2030 2050 Cross-sector(ACA)40 reduction pathway based on 2020 as the reference yea

266、r-42%-90%Source:based on pathways to net-zero SBTi Technical Summary(version 1.0 October 2021)Table 4:Example of climate-aligned decarbonisation rate proposed by SBTi GHG targets assessment criteria 5:The assessor should ensure that GHG reduction targets cover gross absolute emissions and do not inc

267、lude carbon credits inside or outside the company value chain or any avoided emissions generated by the companys sold products.GHG targets assessment criteria 6:The assessor should ensure that GHG reduction targets related to scope 2 emissions are not based on contractual electricity instruments or

268、energy attribute certificates.GHG targets assessment criteria 7:The assessor should ensure that GHG reduction targets cover short-,medium-and long-term horizons.GHG targets assessment criteria 8:The assessor should ensure that the plan contains interim GHG targets for every five years or at least fo

269、r a time period consistent with the lifespan of strategic GHG-intensive assets of production for high-intensive sectors,or with the lifespan of sold products(goods or services)that will lock emissions until their end of life.GHG targets assessment criteria 9:When emissions intensity metrics are used

270、,the assessor should ensure that the denominator is relevant to the companys activities and not subject to variability in external factors41,such as volatility in prices,and that the expected production growth does not lead to an increase in absolute emissions.GHG targets assessment criteria 10:The

271、assessor should review the companys decarbonisation progress in the recent past and its current performance against its next target.40 Note that Anders Bjrn et al.have some reservations regarding the absolute contraction approach(ACA)(From the Paris Agreement to corporate climate commitments:evaluat

272、ion of seven methods for setting science-based emission targets,Bjrn et al.,April 2021).41 Physical units should be preferred where possible.30 ATP-Col framework and guidance V1,September 2024 Note 1:The recent past can consist of a five-year period from the reporting year.Note 2:The assessor can,fo

273、r instance,check if the company has achieved its previously set targets.Note 3:The assessor can check if the company is on track to achieving its next target and does not deviate from it.8.4 Decarbonisation levers and mitigation actions Decarbonisation levers42 are aggregated types of mitigation act

274、ions,such as energy efficiency,electrification,fuel switching,use of renewable energy,product change and supply chain decarbonisation,that fit with the companys specific actions.Mitigation actions refer to:actions and action plans that the company undertakes to deliver against its set targets and ad

275、dress material impacts,risks and opportunities;and decisions the company takes to support these with financial,human or technological resources.Note that the investment plan of the company supporting its transition plan is addressed under section 9.5 covering assessment criteria for financial elemen

276、ts.8.4.1 Red flags The company does not provide an action plan regarding how it will reach its short-,medium-and long-term targets and prevent transition risks.Note:At the least,the companys transition plan should provide an explanation of the decarbonisation levers it has identified,the sequencing

277、of their deployment and the key actions planned,including changes in the companys product and service portfolio and its adoption of new technologies in its own operations or upstream and downstream in its value chain.The company does not quantify the GHG emissions reduction resulting from the action

278、s it plans to implement(see Figure 8 and Table 5 for examples of good disclosure)Note:The description of the decarbonisation levers implemented or planned by the company(e.g.energy or material efficiency and consumption reduction,fuel switching,use of renewable energy,phase out or substitution of pr

279、oduct and process)should include information on their overall expected quantitative contributions to achieving the GHG emissions reduction targets.There is no information(qualitative or quantitative)in the transition plan regarding the potential locked-in emissions of the company(see appendix 3).The

280、 company does not provide an explanation regarding the sensitivity of its mitigation actions to the external factors on which they depend to achieve the strategic ambition(and appendix 4).The transition plan does not provide financial elements regarding how the company will fund its mitigation actio

281、ns(see section 8.6).There is no information in the plan related to the forecasted production activities.In the case of fossil fuel companies,there is no fossil fuel phase-out plan included in the companys transition plan.42 COMMISSION DELEGATED REGULATION(EU)2023/2772 of 31 July 2023 supplementing D

282、irective 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards 31 ATP-Col framework and guidance V1,September 2024 Carbon credits are considered as mitigation actions to reach intermediate targets or account for a disproportionate share of long-term t

283、argets.Note 1:Companies should not use carbon credits to deliver on short-or medium-term GHG reduction targets.A company should prioritise its own GHG emissions reductions and removals over the use of carbon credits.It should prioritise direct reduction in all GHG emissions within its boundaries,lim

284、iting residual emissions to a minimum,in line with science-based pathways that are aligned with a high likelihood of limiting global warming to 1.5C above pre-industrial levels.Note 2:Any use of carbon credits should be restricted to addressing residual emissions only and should be reported separate

285、ly,so that the company does not count carbon credits and offsets in its short-and medium-term targets,nor relies on these to reach such targets.Note 3:Despite the absence of a consensual definition for residual emissions,the main frameworks,such as those by CBI,ESRS,ISO,GFANZ or SBTi,limit residual

286、emissions to 5-10%of total(scope 1,2 and 3)emissions.Note 4:Use of carbon credits should follow higher expectations set out in recognised guidelines,such as section 10 of the ISO Net Zero Guidelines.8.4.2 Granularity In many use cases,the assessor will need to at least have access to a description o

287、f the implemented and planned decarbonisation levers and their overall quantitative contributions to achieving the GHG emissions reduction targets(see examples in Figure 8 and Table 5).Additionally,the assessor will need to have access to the hypothesis and information on the quality of data used by

288、 the company to quantify its own GHG emissions reductions or its contribution to GHG reductions in the global economy.The assessor will also need access to the decarbonisations levers disclosed,if not at asset level,at least at the geographical level where the company operates.For specific use cases

289、,the assessor may also need a detailed investment plan of the company per asset(see section 8.6.1),or at least per geographical location where the company operates.Figure 8:Illustration of GHG decarbonisation by action(adapted from ESRS E1)32 ATP-Col framework and guidance V1,September 2024 Table 5:

290、Decarbonisation levers in the short-and medium-term(table from ESRS E1)In use cases that question the feasibility of the transition plan,the assessor will need to understand all the key assumptions the company has made,especially regarding dependencies on external factors that the company relies on

291、to implement its decarbonisation levers and meet its emissions reduction targets.Table 6 provides a categorisation of transition plan external dependencies(see appendix 4 for more details).Category External dependency 1.Non-physical 1.1 Policy strategy 1.2 Regulatory framework 1.3 Market and economi

292、cs 1.4 Public acceptance 1.5 Consumer and client behaviour 2.Physical 2.1 Infrastructure availability and logistics 2.2 Technology 2.3 Resource availability 2.4 Environmental impacts and ecosystem services 2.5 Labour availability Table 6:Categorisation of transition plan external dependencies 8.4.3

293、Assessment criteria Decarbonisation levers assessment criteria 1:The assessor should ensure that the decarbonisation levers cover and impact relevant GHG emissions categories of the companys GHG inventory(see section 8.2).Note:The levers can be technological or non-technological,for instance:energy

294、or material efficiency,consumption reduction,electrification,fuel switching,use of renewable energy,phase-out or substitution/change of product and process,eco-design,supply-chain decarbonisation,influencing client behaviour to modify demand,climate policy regarding liquidity management(e.g.climate

295、criteria to select a bank).Decarbonisation levers assessment criteria 2:The assessor should ensure that the decarbonisation levers planed by the company in the short,medium and long term contribute quantitatively to achieving 33 ATP-Col framework and guidance V1,September 2024 the respective GHG emi

296、ssions reduction targets set by the company and do not lead to delaying the strategic ambition or to locked-in emissions(see also 8.4.4).Decarbonisation levers assessment criteria 3:The assessor should check the hypothesis,calculations and figures provided by the company for each of its decarbonisat

297、ion levers,where this information is available,to ensure the company does not overestimate the expected contribution of the decarbonisation lever.Note 1:Internal capabilities of the company to act on the decarbonization levers should be challenged by the assessor.Decarbonisation levers assessment cr

298、iteria 4:The assessor should ensure the company has clearly identified the external factors on which it depends to implement the decarbonisation levers it uses to achieve the strategic ambition of its transition plan,and that the company is addressing those dependencies.This should include checking

299、that the company has assessed the transition plans consistency with these external factors,including by assessing its geographical dependencies at asset-level(see Appendix 4).Note 1:When a companys transition plan relies on some specific resources or energy vectors,for instance biomass or hydrogen,t

300、he assessor should characterise the availability of such materials and of the related infrastructures where the company plans to use them(see appendix 4).Decarbonisation levers assessment criteria 5:The assessor should ensure that the companys decarbonisation levers do not lead to an increase in its

301、 climate-related risks or have other negative environmental or social impacts.Decarbonisation levers assessment criteria 6:The assessor should ensure that the companys decarbonisation levers are coherent with the sectoral transformation needed to limit global warming to 1.5C with no or limited overs

302、hoot.Note 1:To do so,the assessor can notably rely on the sectoral milestones identified in scenarios like the International Energy Agencys(IEA)Net Zero Emissions(NZE)scenario or relevant local or sectoral transition plans(see section 5).Note 2 :Especially in the case of some energy-intensive/hard t

303、o abate sectors where technological innovations are critical to mitigate GHG emissions,the assessor should ensure that the deployment dates are aligned with the technology readiness level43 and licence availability to use such technologies.Ideally,companies and assessors can find this information in

304、 sectoral transition pathways(see section 5)Decarbonisation levers assessment criteria 7:Where relevant,the assessor should ensure that the companys contributions to the decarbonisation of the global economy are not overestimated nor misleading and are associated with figures expressed in tangible p

305、hysical units.Note 1:This is especially relevant for enablers/climate solutions providers and for companies that develop or increase the climate solutions offering in their portfolio.Note 2:Physical units can,for instance,be renewable electricity capacity produced,number of low-carbon vehicles produ

306、ced,amount of energy savings from goods and services.Decarbonisation levers assessment criteria 8:The assessor should assess the evolution of the companys technology mix against the evolution of the sectoral technology mix identified in the companys selected sectoral transition plan(s).43 See for in

307、stance the IEAs Clean Energy Technology Guide.34 ATP-Col framework and guidance V1,September 2024 Decarbonisation levers assessment criteria 9:The assessor should assess the consistency between the companys production capacities and its strategic ambition(see also sections 8.4.4 and 8.6.1.3).8.4.4 A

308、dditional assessment criteria for decarbonisation levers in specific sectors Some assets from GHG-intensive(hard-to-abate)sectors,fossil fuel producers and producers of energy-intensive products or products that will emit GHGs during their entire lifespan including end of life(e.g.fossil fuel intern

309、al combustion engine transportation vehicles,fossil fuel boilers,furnaces or heating systems,halocarbon-based cooling systems,N-fertilizers)are associated with high transition risks from locked-in emissions44(see appendix 3).For these sectors and producers,we propose additional assessment criteria i

310、n relation to decarbonisation levers,focusing on locked-in emissions.Note:Any existing or upcoming fossil fuel well or mine contributes to locked-in emissions due to the use phase of the future extracted products but also,to a smaller extent,due to the extraction phase of such assets(leakages,flarin

311、g,venting).Locked-in emissions assessment criteria 1:The assessor should analyse the companys future cumulative GHG emissions(i.e.locked-in emissions)implied by the companys installed and planned production assets(or products)over a chosen time period from the reporting year.Note 1:Analysis can be d

312、one,for instance:by comparing the locked-in emissions against the carbon budget allocated to the company according to the chosen sectoral decarbonisation pathway(s),or by any other approach that provides relevant insights regarding the risk for the company of not meeting its 1.5C-aligned GHG reducti

313、on targets due to its locked-in emissions.Note 2:The chosen time period should be representative of the lifespan of assets/products.Note 3:Assessors should check that O&G companies have assessed their forward transition risk against price projections in 1.5C scenarios and how their planned productio

314、n is based on price projection that reflects future demand aligned with 15C scenario.Locked-in emissions assessment criteria 2:The assessor should assess the consistency between the companys existing and planned production capacities against the long-term production projections45(see Figure 9:)throu

315、gh the lens of potential locked-in emissions.This allows for an assessment of the extent to which the company is likely to deliver long-term production with the current and planned production capacities while identifying potential gaps and potential locked-in emissions risks.Note 1:Existing and plan

316、ned activities are the actual production capacities of the companies.Note 2:Long-term production projections constitute the production forecasted for the company or the projected sectoral production trend to which the company would likely have to answer/contribute.Note 3:The assessor can compare act

317、ivities secured by the companys existing and planned assets(see Figure 10:)against expected activities(forecasted for the company or the sector).This conservative approach helps ensure there is no gap between how much the company plans to produce(or how much the sector requires it to produce)and the

318、 future production capacities of the company,without assuming that this gap is automatically filled by hypothetical low-carbon activities.44 Note that despite this topic being critical for transition challenges,locked-in emissions are not directly covered by GHG accounting standards,except through t

319、he lens of the use phase of sold products to a certain extent.Companies are not used to quantifying and disclosing such information at the moment.45 Fifteen years can be considered a reasonable timeframe for long-term projections.35 ATP-Col framework and guidance V1,September 2024 Figure 9:illustrat

320、ive companys secured activities considering existing and planned assets46 Figure 10:Illustrative comparison of projected secured activities against expected activities46 (adapted from ACT generic V2)8.5 Governance Without relevant governance mechanisms the implementation and success of the transitio

321、n plan is likely impossible.8.5.1 Red flags The company does not provide any relevant information or provides only vague or limited information on how its transition plan is embedded within its governance structures and organisational arrangements.This concerns information regarding the following:o

322、Board oversight and reporting There is limited information about the governance body/bodies or individual(s)responsible for oversight of the transition plan.o Management roles,responsibility and accountability There is limited information about managements role in the governance processes,controls a

323、nd procedures used to monitor,manage and oversee the transition plan,as well as how the transition plan is embedded within the companys wider control,review and accountability mechanisms.o Incentives and remuneration The company provides only a vague reference to remuneration and incentives linked t

324、o ESG or sustainability performance.46 Source:ACT Generic Methodology version 2.0,Accelerate Climate Transition Initiative,December 2023 36 ATP-Col framework and guidance V1,September 2024 There is limited information about how the company aligns or plans to align its remuneration and incentive stru

325、ctures with the strategic ambition of its transition plan.There is no information regarding how incentives and remuneration pertain to the companys board(or equivalent body)and executive pay.o Skills,competencies and training There is limited information about the competencies of the companys decisi

326、on-makers in relation to climate change risks and opportunities.There is limited information regarding actions the company is taking or plans to take in order to assess,maintain and build the appropriate skills,competencies and knowledge across the organisation in order to achieve the strategic ambi

327、tion of its transition plan.8.5.2 Granularity In most use cases,none of this information is sensitive to local context,nor does it necessitate additional geographical precision or breakdown.Nevertheless,depending on the companys organisational and governance structure in relation to its subsidiaries

328、,business units and national sub-entities,the assessor may need to better understand,where relevant,how the companys governance at the level of the consolidated accounting group influences the other linked sub-entities or vice versa.This can be necessary,for instance,if the scope of the assessment i

329、s a sub-entity of a group in a specific country.8.5.3 Assessment criteria The assessment criteria related to governance are listed below.Additional guidance and resources to help the assessor address some of the governance assessment criteria are proposed in appendix 6.Governance assessment criteria

330、 1:The assessor should ensure that the topic of climate change is embedded at the highest decision-making level of the company and that leadership accountabilities regarding the transition plan are clearly defined.Note:The assessor can look for evidence of board(or equivalent body)oversight of the c

331、ompanys transition plan,e.g.approval of the transition plan by the board,inclusion of the transition plan in the agenda of the board meetings,accountability of the board regarding transition plan delivery.Governance assessment criteria 2:The assessor should ensure that the companys governance and or

332、ganisational arrangements embed the strategic ambition of its transition plan and do not undermine the success of the latter.Note:The assessor can look for approved strategic orientations that could antagonise the strategic ambition of the transition plan.Governance assessment criteria 3:The assesso

333、r should ensure that the board(or equivalent body)has access to the results of climate change scenario analysis and takes informed decisions based on this.Note:As informed decisions depend on the quality of the climate change scenario analysis,the assessor can also assess the companys scenario analysis practices(see Table 17 of appendix 6)Governance assessment criteria 4:The assessor should ensure