Presentation by Nico Fettes, Head of Product Development Capital Markets, CDP

1. 1
OECD Workshop on Metrics for Climate Transition
and Net-Zero, Session 1: Metrics and indicators
supporting net zero for different financial assets
Title:
How can we credibly measure the
climate performance of companies? -
A CDP approach
Presenter: Nico Fettes, Head of Product Development
Capital Markets, CDP Europe.
Paris, 22 February 2023

2. 2
About CDP
NON-PROFIT COLLECTING ENVIRONMENTAL DATA
Environmental
data collection
Environmental data
Companies &
Financial
institutions
Financial institutions
& Purchasing
organisations
Environmental data
Disclosure request
Authority
 Collecting climate-related
data from companies since
2003
 Over 700 institutional
investors support our work.
 In 2022, over 18,000
companies disclosed
environmental data through
CDP
 Largest database of self-
reported environmental data

3. 3
Measuring climate performance
We produce key outputs at company-level
1. Target ambition metrics
(forward-looking)
Emissions reduction
target ambition in °C
2. Transition plan metrics
(present)
Transition plan elements
disclosure
3. Emissions metrics
(backward-looking)
Emissions disclosure
+
Trajectory in °C
to satisfy the requirements of portfolio target setting frameworks (SBTi, NZIF)…
and to enable company dialogue on disclosure and climate action.
Three complimentary categories of metrics

4. 4
Simplified example
Target ambition
• Gross ambition: 50%
• Boundary coverage: 70%
• Net ambition: 35%
• Climate benchmark: IPCC
heavy industry
Transition plan disclosure
• Board oversight
• Management incentives
• Scenario analysis
• CapEx alignment
• …
• …
Emissions trend
• Disclosure completeness:
90%
• Trend quality: 75%
• Projected short term growth
rate: -3.5%
Outputs at company-level
> 2 °C 60% < 2 °C
End-user to determine final degree of alignment – Red flags point to weaknesses in disclosure

5. 5
Opportunities, challenges and greenwashing risks
Opportunities Challenges
How to manage
greenwashing risks
Target ambition
metrics
Forward-looking;
Granular data available;
Greenwashing risks
Detailed target boundary
coverage check;
Combine with other metrics
Transition plan
metrics
Holistic
Lack of standards and
benchmarks
Develop benchmarks;
Conduct qualitative analysis
Emissions (trend)
metrics
Based on actuals
Volatility & data gaps;
lack of domain knowledge
Data cleaning / modelling;
Apply threshold criteria

6. 6
Can we credibly measure climate performance?
 Yes (with lots of hard work) but not for all companies in global portfolios
 Greenwashing risks inherent in self-disclosed data need to be managed
→ How can we better understand the true climate motivation of corporate
leaders?
 Forward-looking measurement will always require qualitative analysis
→ Do we need an industry for “analyst views” on climate impact?