To limit global temperature rise to 1.5°C and avoid the most severe impacts of climate change, global emissions need to reach net-zero by 2050. But assessing the ambition of corporate emissions reduction targets can be very challenging, as companies often publish a multitude of targets covering different scopes, organizational levels and metrics.

The CDP-WWF Temperature Scoring Methodology is an open source, transparent methodology which translates these complex targets into temperature scores – a single, intuitive metric for decision-making. This in turn allows financial institutions and large corporates to engage with companies to set or improve targets, compare ambition levels, measure the alignment of their portfolio or value chain within 1.5°C of warming, and set their own Scope 3 targets accordingly.

How does it work?

The methodology includes three steps:

1. a target protocol, which converts individual emissions targets to temperature scores;

2. a company protocol, which aggregates these targets into a company-level temperature score; and

3. a portfolio protocol, which weights these company scores across an investment portfolio.

To convert individual emissions targets into temperature scores, the methodology uses the latest climate science available (ca. 1200 vetted climate scenarios from the IPCC's Sixth Assessment Report scenario database). It generates simplified benchmarks to capture the relationship between GHG emissions trajectories and expected global warming likely to be observed at the end of the century.

It provides a rule-based approach to harmonize the treatment of Scope 1, 2 and 3 corporate emissions reduction targets over different time horizons (short-, medium- and long-term), and to deal with missing data. At the portfolio level, these company scores are weighted to assess an index or portfolio of companies.

Companies that do not have relevant, publicly disclosed emissions targets are assigned a default temperature score which assumes a business-as-usual temperature pathway. This enables company-by-company and portfolio/value chain comparisons.

The CDP-WWF Temperature Scoring Methodology can be used by financial institutions to calculate the current temperature of a portfolio – or by large corporates to calculate this for a value chain – which is a key starting point for aligning Scope 3 emissions with long term temperature goals, such as 1.5°C. CDP’s Net-Zero Alignment Dataset and the Science Based Targets initiative’s framework for financial institutions currently use the methodology. It is also currently implemented by a number of data providers.