Issuer Gateway Knowledge Hub

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Low Carbon Transition Ratings

Glossary of Terms

February 2023


TermExplanation 
Baseline GHG Emissions Gap
The absolute difference between the company’s projected emissions from all scopes and its net zero-aligned emissions budget to 2050.

Baseline GHG Emissions Gap Percentage
The percentage difference between the company’s baseline emissions from all scopes and its net zero-aligned emissions budget to 2050.

Baseline GHG Emissions Projection

The company's baseline emissions from all scopes from now until to 2050. The baseline emissions assume that the company has not taken any steps to actively manage its emissions.

Exposure

 

An implied temperature alignment that specifies what degree would the world warm if all companies baseline emissions differed from their net-zero budgeted emissions to the same degree as this company.


Exposure Category

A categorical description of the company's Exposure.

GHG Emissions Budget
The company’s budgeted emissions from all scopes of emissions for the period from now until 2050.

Global Emissions Budget
The cumulative amount of GHG emissions, in gigatonnes, that can be emitted by anthropogenic sources while maintaining global warming below a certain level. Sustainalytics’ global emissions budget is focused on limiting warming to 1.5° by 2050, with the budget derived from calculations provided by the International Energy Agency (IEA).
Low Carbon Transition Rating
Category

A categorical description of the company's Low Carbon Transition Rating. 
Low Carbon Transition Rating
An implied temperature alignment that specifies what degree the world is expected to warm if all company’s emissions differed from their net-zero budgeted emissions to the same degree as this company.


Managed GHG Emissions Gap
The absolute difference between the company’s managed emissions from all scopes and its net zero-aligned emissions budget to 2050.

Managed GHG Emissions Gap Percentage
The percentage difference between the company’s managed emissions from all scopes and its net zero-aligned emissions budget to 2050.

Managed GHG Emissions Projection
The company’s projected emissions from all scopes of emissions for the period from now until 2050 after accounting for management.

Management
A score that indicates the strength of the company's management systems in regard to managing its exposure to the low carbon transition.

Management categoryA categorical description of the company's Management.
Scope 1Scope 1 refers to direct emissions that are from company-owned and controlled resources.
Scope 2
Scope 2 refers to indirect emissions that are from the generation of purchased energy, from a utility provider.

Scope 3 Downstream
Scope 3 Downstream refers to indirect emissions that are generated downstream from the company's production of goods and services (when the company's products are used).

Scope 3 Upstream
Scope 3 Upstream refers to indirect emissions that are generated upstream from the company's production of goods and services (in the supply chain).

Scope of Emissions
The Scope of GHG emissions under consideration, includes Scope 1 (direct operations), Scope 2 (indirect operations), Scope 3 Upstream (supply chain) and Scope 3 Downstream (products and services).

Transient Climate Response to
Cumulative Carbon Emissions

The global average surface temperature change that is expected to result per tonne of GHG emissions, according to the International Energy Agency (IEA).