Methodology
As the platform aggregates data from various data providers, situations may arise where a company has been analyzed for some metrics but not for others. Additionally, a company may have been assessed by the data provider, but it did not provide sufficient disclosure to receive a complete evaluation. Both scenarios result in data gaps.
Typically, if a sub metric or metric is missing, the weights of the remaining sub metrics and metrics are automatically adjusted to compensate for the overall scoring gap. To maintain consistency and ensure comparability, we do not fill these gaps with sub metrics or metrics from the alternative dataset. However, significant data gaps can lead to misleading company grades. To address this issue and preserve the integrity of the grading system, particularly for the overall company grade, we have introduced a set of scoring guardrails:
- Companies may only receive an overall company level score where there is data for one of the emissions-level metrics available (i.e. data for the Emissions and/or Targets metrics).
- Only companies scoring an A in the emissions assessment metrics (Emissions and/or Targets) may receive an overall A grade.
- Scores are limited to the lowest grade given to any of the five metrics
The platform automatically applies the first two guardrails as the default setting. Users have the option to add the third for a stricter grading approach or remove one or both default rules. In Figure 5 below there is the illustration of how the guardrails affect the frequency of companies signaled as climate-aligned within the platform.
As with weightings, deviation from the default approach to these rules has the potential to lead to misleading company grades. Users should use caution when deviating from the default settings as changes can significantly impact the overall gradings. It is recommended that users use the underlying information and their own preferences to interpret a company’s overall performance. Guidance will be provided on how this should be approached in disclosure or marketing.