ACT Assessment methodologies
Below are the final sectoral ACT Assessment methodologies.
ACT Auto
The transport sector represents about one quarter of all energy-related emissions, and poses great challenges in terms of climate mitigation.
Automobile transportation has become the dominant mode of passenger transport, and its consequent importance to decarbonization scenarios is crucial. Despite complex multi-tiered industrial supply chains, there is a defined main activity with corresponding emissions data, which are the fleet emissions of cars sold. This allows the ACT assessment for the auto manufacturing sector to focus on quantitative indicators (gCO2/p.km and share of low carbon vehicles). Other qualitative indicators (in the Management, Suppliers, Clients, Policy Engagement and Business Model modules) are also considered due to the complexity and economic importance of the sector, its changing business models, and the significance of these when considering the low carbon alignment of the auto industry.
ACT Electricity
The Electricity sector is key for achieving global climate goals as it is responsible for a quarter of global emissions, and the transition of other sectors is also reliant on its decarbonisation. Although many technological advances have been made in low-carbon electricity production, most current power plants are still fueled by fossil fuels and many of them are far from retirement. Since current and new installed capacity will lock in emissions for years, successful transition planning requires investment decisions to be made now.
For these reasons, the ACT Electricity methodology focuses on Material Investment (i.e. present and projected electricity production portfolio) and Targets. It will also consider factors such as R&D in low-carbon technologies, and qualitative information such as the company’s climate action management. Electricity sector have a well-defined primary activity (i.e. electricity production), which allows the use of one carbon intensity indicator based on physical production (i.e. gCO2/kWh).
This methodology has been updated in 2023. It now includes electricity generators and retailers.
ACT Retail
The Retail sector represents the central interface in the economy, where manufactured products reach their end consumers. The majority of emissions attributable to the Retail sector are not emitted through a company’s own operations, but rather throughout the value chain. A low-carbon transition towards a 2°C alignment (or beyond) by 2050 will require a transformation not only of the Retail sector’s direct operations, but of its entire value chain from upstream production to downstream use and disposal of products including logistics. The assessment will also consider qualitative factors such as the management approach to climate change and the influence on suppliers and clients.
ACT Cement
ACT Transport
The transport sector accounts for 20% of the global energy-related greenhouse gas emissions, composed almost entirely of CO2 from the combustion of oil. Emissions have increased by over 30% since 2000, largely as a result of an increase in the vehicle stock by 300 million over this period.
The ACT transport methodology covers the rail, road, water and air transport for passengers and freight. It focuses on quantitative indicators using gCO2e/p.km or gCO2e/t.km metrics and share of low carbon vehicles for example. Other qualitative indicators (in the Management, Suppliers, Clients, Policy Engagement and Business Model modules) are also considered due to the complexity and economic importance of the sector, its changing business models, and the significance of these when considering the low carbon alignment of the transport sector.
ACT Oil & Gas
ACT Construction
This present document introduces the ACT building methodology adapted for constructors. Particular emphasis will be placed on the GHG emissions released during the construction phase (including raw materials) and operational emissions caused by the building use, which represents from 43% to 58% of total emissions over a new building’s lifetime. More recent French data (2017-2019) show that GHG emissions from in-use energy, considering all end-uses, represent 50% or less of the total GHG emissions of the building life cycle. The assessment methodology also considers factors such as: market share of low-carbon buildings, R&D expenses in Climate Change Mitigation Technologies as well as low carbon transition plan.
ACT Real Estate
This present document introduces the ACT building methodology adapted for real estate companies. The position of the building industry in the economy makes it difficult to grasp the reality of it. Indeed, the sector covers different activities (real estate development, construction work, building management, etc.) operated by diverse companies. Therefore, assessing the building sector emissions requires a life-cycle approach, integrating all parts of the supply chain. This makes the building sector suitable for analysis via a SDA and allows the ACT assessment to focus on quantitative indicators. Nevertheless, due to the complexity of the sector and its economic importance, other qualitative indicators (e.g. business models…), are also highly significant when considering the alignment with a low-carbon future and should not be neglected or underweighted.
ACT Property Developer
This present document introduces the ACT building methodology adapted for property developers.
Particular emphasis will be placed on the GHG emissions released during the construction phase (including raw materials) and operational emissions caused by the building use, which represents from 43% to 58% of total emissions over a new building’s lifetime. More recent French data (2017-2019) show that GHG emissions from in-use energy, considering all end-uses, represent 50% or less of the total GHG emissions of the building life cycle. The assessment methodology also considers factors such as: market share of lowcarbon buildings, R&D expenses in Climate Change Mitigation Technologies as well as low carbon transition
plan.
ACT Iron & Steel
This present
document introduces the ACT Iron & Steel methodology. Among heavy industries, the iron and
steel sector ranks first when it comes to CO2 emissions, and second
when it comes to energy consumption. Steel production is highly energy-
and emissions-intensive, accounting for around 8% of global energy demand and
7% (2.6 Gt CO2) of
total emissions from the energy system.
The use of steel is associated with economic growth. In 2019, the amount of
steel used globally reached 1768 Mt with the four main markets being building
and infrastructure (52%), mechanical equipment (16%), automotive (12%) and
metal products (10%). According to the IEA, global demand for steel is
projected to increase by more than a third through to 2050 as a result of
growth in these markets.
ACT Aluminium
This present document introduces the ACT Aluminium methodology.
Aluminium is the second most-used metal in the world in terms of metric tonnes produced after iron, hence the most used non-ferrous metal worldwide. The aluminium industry is currently responsible for 2% of global GHG emissions and generates about 1.1 billion tonnes of CO2e annually. Primary aluminium production is highly energy-intensive, with electricity making up a large share of the energy consumed. Aluminium can be recycled almost infinitely and the recycled aluminium production route consumes around 5% of the total energy consumption compared to the primary aluminium production route.
Aluminium is a key metal, especially in the context of the energy transition. Aluminium demand is thus expected to grow. A low-carbon world therefore requires a low-carbon transition of the aluminium sector.
ACT Pulp & Paper
This present document introduces the ACT Pulp & Paper methodology.
As the fourth most energy-intensive industry, accounting for 5.6% of the industrial energy consumption according to IEA, the pulp & paper sector has an important role to play in global decarbonization efforts.
The ACT methodology splits companies into three types: pulp companies, paper & board manufacturers, and paper & board converters. The indicators and their weightings vary depending on the type of activities covered by the company.
The methodology rewards companies that implement low-carbon processes and use low-carbon energy, that commit to ban deforestation and that foster circular economy (use of recovered or alternative fibres).
ACT Glass
This present document introduces the ACT Glass methodology.
Glass adopts many guises and almost every area of our lives involves products with glass at their heart: from transport to homes and workplaces, from food production to health, leisure activities and communications, from museums to art galleries. Glass production requires high temperature and therefore energy, so it is necessary to make a proposition to assess sustainable strategy of companies within this sector. Glass sector GHG emissions is ranked after Cement, Iron and steel, Aluminium and Chemicals. The GHG emissions of this sector are commonly included in the mineral non-metallic sector emissions.
ACT Adaptation
The Article 7 of the Paris agreement defines the global goal of “enhancing adaptive capacity, strengthening resilience and reducing vulnerabilities to climate change”.
To support this goal, the ACT Initiative has developed the ACT Adaptation methodology. By providing this climate adaptation accountability framework for companies from all sectors, it aims at assessing the quality and comprehensiveness of company’s adaptation strategy, from their physical risk analysis to their governance.
ACT Chemicals
The chemicals industry is currently responsible for a fifth of direct emissions arising from heavy industries – representing about 4% of global CO2 emissions. As the chemicals sector being the largest industrial energy consumer, and the forecast activity/demand being expected to keep on increasing in coming decades, it is of prime importance to assess companies’ decarbonisation strategy.
The ACT chemicals methodology considers all companies producing at least one of the primary chemicals at the upstream side of the sectoral value chain, considering both petrochemistry and inorganic chemistry: Ethylene, Propylene, Butadiene, BTX (Benzene, Toluene, Xylenes), Methanol, Hydrogen, Ammonia, Chlorine, Caustic soda, Carbon black, Titanium dioxide, Silicon, Soda ash, Sulfuric acid.
The indicators and their weightings vary depending on the type of activities covered by the company and the respective shares of its emissions related to its production and from the production of its feedstock (the two main sectoral sources of emissions). The methodology rewards companies that implement low-carbon processes, that foster circular economy (e.g. mechanical/chemical recycling, industrial symbiosis), that develop low-carbon products portfolio, and that act as enablers to support others to decarbonise their activities.
Upcoming ACT Assessment methodologies
We are currently pilot-testing these methods with companies. Once their feedback integrated, the methodologies will be finalized.
ACT Agriculture and Agri-food - draft
The land sector is responsible for 10-12 Gt CO2e/year of net GHG emissions – approximately a quarter of global GHG emissions. Half of these are driven by agriculture, while the rest derive from land use, land-use change and forestry (LULUCF). The largest contributions from agriculture arise from enteric fermentation, manure from ruminant livestock production, crop-related fertilization practices and soil GHG emissions. In addition, some 5% of emissions related to food production come after the farm gate, up to but not including retail. Therefore, it is clear that in order to decarbonise the Agriculture and Agrifood sector, the largest GHG emissions reduction will need to be achieved at the agricultural production phase.
The objective of the methodology is to assess most companies in the Agriculture and Agrifood sector. Three subsectors of the food value chain are included within this single methodology: agriculture, agrifood, and food and beverage services. This methodology also contains a fourth weighting scheme for integrated companies which have activities in agricultural production and in food processing.
ACT Finance | Banks
This present document introduces the ACT Finance methodology dedicating to banking activities.
As providers and facilitators of capital, financial institutions have a key role to play in this transition, supporting companies that are transitioning and shifting capital towards climate solutions (cf. article 2.1c of the Paris Agreement).
The most material impact of a financial institution comes from its financed and facilitated emissions which are the indirect greenhouse gas emissions attributable to its financing and facilitating activities. Even though it is important to assess the reduction of these financed emissions at a portfolio level (i.e. target setting), the priority in the methodology has been put on assessing whether the financial institution is financing reduction emissions in the economy.
The ACT Finance ‘Banking’ methodology allows assessing the lending activities of Commercial & Retail Banks as well as their capital market activities (if existing). The indicators and their weightings vary depending on the type of banking activities.
The methodology rewards Banks that (i) have set a clear and robust transition plan, (ii) manage their portfolio through a thorough assessment and categorization of their clients from a climate perspective (low-carbon, aligned, not aligned…) with an associated robust strategy (investing/engaging/excluding) supported by formalized and sound engagement process, GHG emissions monitoring and target setting.
On the opposite, the methodology penalizes Banks for financing (or facilitating capital to) (i) fossil fuel companies/projects expansion and development plans and (ii) deforestation-linked activities.
ACT Finance | Investors
This present document introduces the ACT Finance methodology dedicating to investing activities.
As providers and facilitators of capital, financial institutions have a key role to play in this transition, supporting companies that are transitioning and shifting capital towards climate solutions (cf. article 2.1c of the Paris Agreement).
The most material impact of a financial institution comes from its financed and facilitated emissions which are the indirect greenhouse gas emissions attributable to its financing and facilitating activities. Even though it is important to assess the reduction of these financed emissions at a portfolio level (i.e. target setting), the priority in the methodology has been put on assessing whether the financial institution is financing reduction emissions in the economy.
The ACT Finance ‘Investing’ methodology allows assessing Asset Managers, Private Equity/Debt investors, and Asset Owners. The indicators and their weightings vary depending on the type of investors.
The methodology rewards Investors that (i) have set a clear and robust transition plan, (ii) manage their portfolio through a thorough assessment and categorization of their clients from a climate perspective (low-carbon, aligned, not aligned…) with an associated robust strategy (investing/engaging/excluding) supported by formalized and sound engagement process, GHG emissions monitoring and target setting.
On the opposite, the methodology penalizes Investors for financing (or facilitating capital to) (i) fossil fuel companies/projects expansion and development plans and (ii) deforestation-linked activities.
Can't find a sector covering your business' activities?
ACT Generic
This ACT Generic methodology should be used to assess companies operating in a large and various range of activities all along the value chain such as the following categories :
- Extraction activities: Mining & Quarrying.
- Industry: Specific methodologies have been developed for some industries (see ACT sectoral methodologies). Therefore, ACT Generic methodology focuses on other types of industries such as manufacturing, wholesale and repair of vehicles and infrastructure construction.
- Waste and water management: water transportation and utilities as well as solid waste management.
- Services with high GHG impact: accommodation and food service, information and communication, human health & social work, arts, entertainment and recreation.
- Services with low impact: Education, professional, scientific and technical activities, administrative and support activities, public administration and defence, compulsory social security, activities of households as employers, extraterritorial and other services.
This methodology has beed updated in December 2023.
Don't have a company climate strategy to assess yet?
ACT Step by Step
ACT Step by Step has been developed based on feedback from companies using ACT Assessment methodologies while having little to no transition plan in place. Indeed, they found that the 360° forward-looking approach would suits a method to develop a low-carbon strategy and transition plan step by step starting from current practice and supporting progress all the way until a potential ACT Assessment to reward a good performance.
Therefore, ACT Step by Step builds on learnings from ACT Assessment and feedback from businesses and consultants supporting companies with low-carbon transition planning. A pragmatic approach, it is builds capacity within companies willing to improve their decarbonisation strategy according to sector specific challenges.
