CDP Climate Change 2022 Reporting Guidance

(C3.5a) Quantify the percentage share of your spending/revenue that is aligned with your organization’s transition to a 1.5°C world.

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This question only appears if “Yes” is selected in response to C3.5.

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Rationale

Data users are interested in understanding how your current and future spending and revenue is aligned with a 1.5°C world. This question provides data users with transparency on your climate transition plan in financial terms.

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

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Requested content

General

• This question aims to understand your organization’s unique financial pathway to transition your company to a business model compatible with the level of decarbonization required to keep global temperature increase to 1.5°C compared to pre-industrial temperatures.
• It is up to each company to select the relevant financial metric(s) and methodology(ies) for identifying the alignment of its expenditures/revenues with its climate transition plan. The non-exhaustive list of examples include:
  • Revenue derived from the sale of low-carbon products or services as defined by recognized taxonomies (e.g. The EU Taxonomy for environmentally sustainable economic activities, Climate Bonds Taxonomy, The IEA Energy Technology Perspectives Clean Energy Technology Guide, etc.) could be included in the percentage share aligned with a 1.5°C world.
  • Spending on the implementation of emissions reduction initiatives and/or investment in new low-carbon assets could be included in the percentage share aligned with a 1.5°C world. Equally, R&D spending for new low-carbon products and/or services as defined by recognized taxonomies (e.g. Climate Bonds Taxonomy, The IEA Energy Technology Perspectives Clean Energy Technology Guide, etc.) could be included in the percentage share aligned with a 1.5°C world.
  • Spending/revenue that is related to activities which do not directly contribute to your organization’s climate transition (e.g. revenue from sales of equipment used in both low-carbon and high-emitting assets etc.) should not be included in the percentage share aligned with a 1.5°C world.
• You can make your response more granular by adding multiple rows and selecting “Other, please specify”. For example, if in addition to total OPEX, you wish to report several distinct categories of OPEX (e.g. utilities, business travel, R&D expenses, etc.) separately, you may do so by adding multiple rows and using “Other, please specify” to specify the relevant OPEX category.
• If you are reporting any type of spending on or revenue from low-carbon products and/or services, specify in column 5 whether it pertains to mature technologies or non-mature technologies (e.g., if you finance Emerging Climate Technologies). If this pertains to both mature and non-mature technologies, please provide the breakdown for these.
• Note that this question requests information on spending/revenue that relates to climate mitigation, not climate adaptation.
• It is acknowledged that figures for future years will be estimates. Assumptions underlying these estimates should be disclosed in column 5.

Financial metric (column 1)

• Add a row for each financial metric you would like to provide information for.
• Select “Other, please specify” to provide information for a financial metric that is not listed.

Percentage share of selected financial metric aligned with a 1.5°C world in the reporting year (%) (column 2)

• Enter the spending/revenue that you consider to be aligned with your organization’s climate transition for this financial metric as a percentage of your total spending/revenue for this financial metric in the reporting year.
• This figure should be based on your company-wide financial statement for the reporting year, consistent with your organizational boundary as disclosed in C0.5.

Percentage share of selected financial metric planned to align with a 1.5°C world in 2025 (%) (column 3)

• Enter the spending/revenue for this financial metric that you plan to align with your organization’s climate transition as a percentage of your total planned spending/revenue for this financial metric in 2025.

Percentage share of selected financial metric planned to align with a 1.5°C world in 2030 (%) (column 4)

• Enter the spending/revenue for this financial metric that you plan to align with your organization’s climate transition as a percentage of your total planned spending/revenue for this financial metric in 2030.

Describe the methodology used to identify spending/revenue that is aligned with a 1.5°C world (column 5)

• Provide the criteria used to determine the alignment of the spending/revenue with your organization’s transition to a business model compatible with a 1.5°C world.
• Provide examples of the activities, assets, technologies, products and/or services for which you classified the associated spending/revenue as aligned with a 1.5°C world.
• You may also provide examples of activities, assets, technologies, products and/or services for which you did not classify the associated spending/revenue as aligned with a 1.5°C world.
• Comment on how your organization’s spending/revenue that is aligned with a 1.5°C world is estimated to change over time and describe the assumptions underlying the estimation.

Explanation of terms

• Climate transition plan: a time-bound action plan that clearly outlines how an organization will achieve its strategy to pivot its existing assets, operations, and entire business model towards a trajectory that aligns with the latest and most ambitious climate science recommendations, i.e., halving greenhouse gas (GHG) emissions by 2030 and reaching net-zero by 2050 at the latest, thereby limiting global warming to 1.5. Please refer to the CDP Climate Transition Plan technical note for more details.
• Alignment with a 1.5°C world: refers to the Paris Agreement long-term temperature goal, as expressed in relevant IPCC reports, in particular the IPCC Sixth Assessment Report (AR6) and the IPCC Special Report on Global Warming of 1.5°C (SR1.5). According to the Science-based Targets initiative, aligning with a 1.5°C world currently means reducing Scope 1, 2 and 3 emissions to zero or close to zero and neutralizing any residual emissions by 2050 at the latest.
• Emerging Climate Technology (ECT): a commercially promising technology that addresses climate mitigation challenges but needs to attract enough investment to deploy the technology and develop business models and markets for the product or services it produces. Eventually it may become a successful innovation deployed at scale, generating new markets or profoundly disrupting established (fossil-based) ones (Auerswald et al., 2005). For a more detailed definition and guidance, refer to the ECT initiative.

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