Documentation

The Corporate Commitments and Emissions Explorer contains five preset outlooks. Outlooks are portfolios of toggle settings that generate a scenario of emission pathways.

1. Current Outlook: This scenario will apply current public commitments. Where companies do not have commitments, the baseline multiplier (in this case revenue growth rates) will be applied. For companies that do not report emissions to CDP, we apply the median emission intensity for their respective sectors to their 2022 revenue to obtain a start year emissions value.
2. Climate-Aligned Action: This scenario applies more ambitious climate commitments than the current outlook. We apply a 2050 net-zero emissions target and an interim target of 50% reduction from 2022 levels by 2030. For companies that do not report emissions to CDP, we apply the median emission intensity for their respective sectors to their 2022 revenue to obtain a start year emissions value.
3. Herd Catches Leaders: In our data, we have categorized companies into laggard, herd, and leader groups based on their emission intensities and climate commitments (more detail on categorization can be found below). In this scenario, we initially set companies to the median sector intensity for companies that do not report emissions to CDP. We then allow a “ramping” of intensity to the minimum. This ramping is specified in a script and is differentiated across companies. More on ramping can be found in Start Year Emissions, below.
4. Laggards Catch Herd: In this scenario, we apply a net-zero by 2050 target to any company that does not have a publicly announced commitment.
5. No Further Action: This scenario illustrates what happens if companies do not take action beyond currently published targets.

This scenario estimates annual emissions based on the following formula:

emissions_cy=emissions_cy0×revenuegrowth_ry

where c is company, y is year, y₀ is the start year (2022), and r is the selected measure of revenue growth relative to the start year. Users can select a revenue growth measure based on the industry’s S&P Global Index or historic growth rates compiled by NYU.

Each target scenario is based on this expanded formula, based on the baseline scenario

emissions_cy=emissions_cy0 ×revenuegrowth_ry×endtargets_cy×interimtargets_cy×partialtargets×offsets

where c is company, y is year, y₀ is the start year (2022), and r is the selected measure of revenue growth relative to the start year. Each of the variables following revenuegrowth_ry are multipliers that are applied when the user selects respective toggles (see below).

The base for both baseline and target scenarios is the start year emissions (emissions_cy0).

Where companies have disclosed emissions to CDP, emissions_cy0 will equal the disclosed emissions in the start year (2022).

Where companies have not disclosed emissions to CDP, emissions_cy0 will equal the product of that company’s start year revenue and the emissions intensity for its respective sector. Users can select among minimum, median, and maximum intensities for this estimation.

In the Herd Catches Leaders scenario, we apply a separate intensity column that begins at the median sectoral intensity and ramps down to the minimum intensity (i.e., the leader’s intensity) over a specified number of years. Companies are first categorized into 3 groups that determine the order in which they begin to catch up. A company will begin to ramp down to the minimum intensity in the specified year for its group, over the specified number of years for its group.

Users can select between Scope 1 and Scope 2 emissions, or a combination of the two. Scope 1 emissions are emissions associated with a company’s direct activity. Scope 2 emissions are those associated with a company’s energy use. While CDP includes information on Scope 3, most companies do not disclose this information so we do not include it in our dashboard.

Users can select between minimum, median, and maximum sectoral emission intensities for respective emission scopes. The selected intensity is used in estimating the start year emissions where companies do not disclose to CDP. Because these values are based on companies that do disclose to CDP, we believe they will be underestimates (as disclosing companies are more likely to have lower emissions).

Users can select between revenue growth rates from the S&P Global Index or from a database on historical annual growth rates compiled at New York University. These growth rates will be applied to calculate the baseline trajectory. These growth rates are included as revenuegrowth_ry in the formula above.

End targets are the long-term commitments companies make. For this dashboard, we use commitments tracked by the Net Zero Tracker. We translate end targets into percent reduction from the start year. The percentage reduction is the endtargets_cy multiplier in the formula above. Where a company does not have a long-term commitment, endtargets_cy is effectively set to 1.

Interim targets are the medium-term commitments companies make, typically by 2030. For this dashboard, we use commitments tracked by the Net Zero Tracker. We translate interim targets into percent reduction from the start year. The percentage reduction is the interimtargets_cy multiplier in the formula above. Where a company does not have a long-term commitment, interimtargets_cy is effectively set to 1.

If a user selects a slowdown, they postpone corporate action to a later year (2030 or 2040). We apply the baseline trajectory until the postponed year and then apply the end and/or interim target multipliers. While companies will ultimately meet their end and/or interim target (if the user selects these toggles), the cumulative emissions will be significantly higher.

Users can select whether companies meet the targets they set. If a company meets only 30% of its targets, the dashboard will increase the emissions in the target trajectory by 70%. This is included as a constant (partialtargets) in the formula above.

Users can select whether a company meets its target with carbon offsets, and how much of the target it meets using offsets. Offsets will increase a company’s emissions pathway. For example, if a company meets 60% of its target with offsets, its emission pathway will increase by 40%. This is included as a constant (offsets) in the formula above.

If a user selects “yes” for this toggle, herd companies catch up to leader companies in terms of both commitment and intensity. Climate commitments for herd companies are set to net-zero by 2050, 50% reduction by 2030. Emission intensities are set to ramp down to the minimum intensity for that sector. See “Start Year Emissions” above for a description on how this ramping is estimated.

Companies are categorized into three groups: laggard, herd, and leader. We categorize companies based on their climate commitments, emission intensity, and whether they disclose emissions to CDP.

Laggards include companies:

• … that disclose to CDP, with emission intensities greater than the sector median, and no long-term climate commitments
• … that do not disclose to CDP and have no long-term climate commitments

Herd includes companies:

• … that do not disclose to CDP but do have long-term climate commitments
• … that disclose to CDP, have intensities greater than the median, and have long-term climate commitments
• … that disclose to CDP, have intensities less than the median, and do not have long-term climate commitments

Leaders include companies:

• … that disclose to CDP, have intensities less than the median, and have the most ambitious climate commitments (e.g., zero emissions, rather than net-zero emissions).