Methodology

The data and analysis served by TransitionArc is presented in several ways to enhance the usefulness and the useability of the data for financial institutions (as well as for other stakeholders such as corporates and NGOs). The available options are explained below.

The Sector Analysis view provides an overview of company grades in each sector (currently this includes Airlines, Auto, Electricity, Oil & Gas, Steel, Cement, Shipping and Food and Agriculture).). For each sector, companies are represented by their overall aggregated grade (A through E, plus no data) on a grid which illustrates the distribution of each sector and the overall alignment of the sector with a credible transition pathway. 

Individual sectors can be selected to see more detail of the sector-level performance across the seven transition metrics. Users can adjust scoring rules and weightings of the metrics on this page. 

The Compare Companies view enables more in-depth comparison of companies by sector in a table format. All companies within a sector are shown as individual rows listing the overall company score and metric-level scores. Users can switch between source datasets and change weightings.

A further level of information is provided for each individual metric allowing deeper comparisons between companies. This option displays the company alignment for each sub metric on which the metric score was based, the raw data on which the sub metric alignment score was based (if available from the underlying data provider), and additional information.

For each company in TransitionArc dataset, there is an individual company page containing:

• The company’s overall grade and position in the sector distribution,
• The underlying metric, sub metric, and additional information available for the company.
• The steps the company needs to undertake to close the gap to an A grade in sub metrics scoring lower than the A threshold.

At the top of the individual company view page, the company’s overall score is shown within the sector-level distribution. Their individual metric scores are also shown in a radar chart. This section also contains a high-level summary of company performance overall and in the seven relevant metrics.

The individual company view page contains a section for each metric. For each metric, the grade, weighting, company position within the sector, the sub metrics used to generate the score, the underlying data provider, and the analysis data used to generate an alignment score by the data provider are shown.

The option to swap the source data to an alternative data provider is also available within each metric section. If this link is clicked, the detailed scoring information will change to show the new score, ranking and underlying data for the alternative dataset.

Relevant additional information is supplied for each metric. This information is not used in the grading calculations but may be relevant when trying to assess the overall direction of travel of a company. For instance, in the Emissions section, the additional information includes recent emissions disclosures from CDP for selected companies and in the Targets section, verification (or not) of company targets by SBTi is shown.

For each sub metric, the company activity data (e.g. targets set, historical emissions intensity) underlying the graded analysis is used to calculate the distance the company is from alignment with the 1.5°C pathway and the action needed to close this gap. User feedback has highlighted particular demand for this functionality.

Clarity on the action required will be enhanced as the transparency and structure of the datasets improves, providing more granularity and specificity. For instance, in some cases, company climate performance data is currently provided in a dimensionless score which is not obviously linked to a disclosed company datapoint (e.g. disclosed emissions or number of products sold) or to a tangible company activity (e.g. for automobiles, predicted company electric vehicle share).  Where the company assessment result provided is dimensionless without visibility to the underlying activity generating the score, the remedial action needed to improve the company grade is not possible to automatically generate, which in turn makes it harder for investors to engage and drive change within the company on climate.

Arc will also work to expand partnerships in this area, including with organisations that have extensive touchpoints with companies and insight into the key measures that companies can and should implement. 

* Figures are indicative only. Data and assessments are updated regularly on TransitionArc. Please refer to the live site or API for all available and up-to-date grades, scores, and performance.