The CDP and the ADEME have launched the ACT (Assessing Low-Carbon Transition) project, defining a new rating regarding climate change management. The methodology will assess the transition of companies towards a low-carbon economy.
What is the ACT (Assessing Low-Carbon Transition) framework?
ACT, or Assessing Low-Carbon Transition, is a methodology developed by CDP and ADEME to assess how companies are transitioning to a low-carbon economy. It is backed by increasing investor interest in comparing companies’ readiness for the low-carbon future.
ADEME is the French Environment & Energy Management Agency. CDP is a not-for-profit that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.
The pilot project focus on three sectors: automotive manufacturers, electric utilities and retail – companies like BMW or Uniper are part of the project.
Before taking part in the ACT, companies are expected to:
- Measure their impacts;
- Report transparently;
- Make public commitments, with setting science-based targets as a best practice.
The goal of the ACT framework is to measure how far a company has advanced in this transition, and to benchmark it against its competitors and the “ideal” pathway, resulting in a rating comparable to that of CDP. It relies largely on quantitative indicators and mathematical methods with the aspiration to derive rigid and reliable KPIs on a company’s progress.
ACT: a framework reflecting current challenges
In December 2015, countries agreed to curb climate change and keep global warming increase below 2°C with the Paris Agreement. In this sense, it is key to resort to energy efficient products and processes, as they enable organizations to save GHG emissions.
The current context also shows increasing transparency from companies who report their GHG emissions. 15 years ago, disclosure on environmental topics was scarce. However, today, some 5,800 companies disclose through CDP. They represent close to 60% of global market capitalization (2016).
Low-carbon economy is an important topic. The 2016 CDP Climate Change questionnaire also contains a question on low-carbon products, enabling to transition to low-carbon economy, e.g. an economy on which the 2°C target is complied with.
What are the next steps for companies regarding ACT?
Currently, the ACT methodology for the three sectors is in consultation. When the methodology is released (scheduled for 2017), companies may be requested to take part in the ACT rating.
Companies will be asked to provide information about their current and past situation in terms of emissions reduction strategy, carbon footprint. Judging from the pilot questionnaires which DFGE has reviewed, many requests are taken over from the CDP Climate Change Core questionnaire; others from the CDP sector supplements. The ACT rating will then reflect the maturity of current strategy and plan towards low-carbon transition.
DFGE will be there to help you! As a CDP partner for many years, and supporting companies in setting Science-Based Targets and measuring carbon footprint, we can provide you hands-on assistance to take part in the ACT rating, and to lead the way towards a low-carbon economy.