The Assessing low Carbon Transition Initiative
ACT is a voluntary initiative of the UNFCCC secretariat Global Climate Agenda supporting corporate climate accountability. It develops sectoral methodologies as an accountability framework to support companies with delivering low carbon transition strategies and actions aligned with the Paris Agreement mitigation goal. An ACT assessment provides companies with a feedback report outlining best practice and opportunities for improvement and a rating to track progress. ADEME, the French Agency for Ecological Transition, and CDP, co-founded the initiative in 2015 at COP21. More about the co-founders here. ACT is a registered trademark in the EU and UK.
Launched at COP21, ACT responds to the need for:
- A forward looking approach to decarbonisation, beyond carbon accounting, to assess how the private sector’s climate actions contribute to “hold the increase in the global average temperature to well below 2°C above pre-industrial levels” (Paris Agreement art.2).
- A framework to assess the relevance and trustworthiness of private sector public GHG emissions mitigation commitments
Ultimately, the objective of the ACT initiative is to drive climate action by companies and to help them align their strategies with low-carbon pathways. ACT builds on the Paris Agreement mitigation goal , and subsequent IPCC carbon budgets, and global mitigation scenario by using IEA sectoral and regional/national scenarios as decarbonisation pathways. Any other relevant decarbonisation pathways can be used in the ACT tools for specific assessments. It assesses the gap between these low-carbon trajectories (or any trajectories that are of relevance from the assessment perspective) and the company’s trajectory. ACT assessments identify company’s strategy misalignments and provide recommendations, therefore closing the gap between corporate commitments and actions required to deliver a well-below 2°C economy.
With the ACT initiative, ADEME provides expertise with sectorial decarbonisation and transition challenges and international climate standards development, tools and training. It is also a major funder of the initiative. CDP brings technical expertise and experience in environmental disclosure, benchmarking and climate change mitigation actions to the ACT initiative. It also engages its global network of companies and other stakeholders for them to share best practice and contribute to the developments of the initiative.
ACT sectoral methodologies are open source and freely available documents describing the rules and scope to assess a company low carbon strategy against relevant sectoral decarbonisation pathways. The methodologies are used to produce ACT assessments. Companies can use ACT sectoral methodologies to:
- Identify climate transition risks and opportunities including “well-below 2°C aligned” business models
- Define an ambitious yet realistic low-carbon strategy
- Set relevant indicators and actions across company strategic operations
- Identify gaps to the company operational readiness to transition to a low-carbon world
- Improve the credibility of low-carbon strategy and commitment
- Engage with stakeholders including investors about the company
We consider the ACT pilot project phase as the time period between the launch at COP 21 in 2015 and the end of 2018. It aimed at:
- Identifying the key questions that need an answer to understand how companies contribute to the decarbonisation required to achieve the Paris mitigation goals
- Defining the process to develop sector specific methodologies to assess companies low carbon transition strategies against relevant sectoral decarbonisation pathways
- Developing and testing with companies three sectoral methodologies targeting three sectors with very different challenges when it comes to decarbonisation
- Testing methodologies with SMEs and mid cap companies using the French low carbon strategy (budget and pathways)
- Refreshing the draft methodologies (retail, electric utilities and automotive) and tools
ADEME, EIB and EIT Climate KIC co-funded the ACT pilot project. The chart below outline their funding shares: ADEME, CDP and Association Bilan Carbone made significant in-kind contributions as outlined in the chart below.
During the pilot project, an advisory group was formed of representatives of commercial and non-profit organizations and agencies working in the field of climate reporting. The advisory group was invited to comment on and review the methodologies via webconference and online at each stage of development. Beyond ACT cofounders, partners included ClimateCHECK, 2° Investing Initiative and European Investment Bank. Additionally, 21 companies volunteered to get an ACT assessment of their low carbon strategies with the existing historic ACT sectoral methodologies (auto, retail, electric utilities). Twelve completed their assessment. The ACT pilot report present the aggregated scores at sector level and key learnings.
Currently the ACT board includes the cofounders – ADEME and CDP – who lead on the ACT initiative strategy. The ACT secretariat is made up of dedicated staff from ADEME and CDP and external resources funded by EIT Climate KIC. The secretariat implements the initiative strategy set out by the board including steering Technical Working Groups and local councils. Interested in joining the ACT governance? Contact us at email@example.com