Our analysis is created using publicly available data on emissions reduction commitments and actions. Sources include annual financial reports, sustainability strategies, relevant charters (such as the UN Principles for Responsible Banking Climate Change Commitment and the UNFCCC’s Fashion Industry Charter for Climate Action), and pledge platforms (such as RE100 and the Science Based Targets initiative).

For each organisation evaluated, we conduct a detailed assessment of their emissions reduction commitments and activities under the following headings: energy conservation, renewable electricity, electrification/fuel switching and non-energy emissions. For commitments or activities that will reduce emissions financed through investment and lending activities (portfolio emissions), our analysis is delineated by different financial products and services, such as loans, equity, real estate, project and corporate finance. Under these headings, we use the following categories to classify an organisation’s commitments and activities:

• Specific target that aligns with net zero emissions by or before 2050. For example:
  • Energy conservation: commitment equivalent to one of the EP100 pathways or similar.
  • Renewable energy: commitment to use 100 per cent renewable energy.
  • Electrification/fuel switching: 100 per cent shift to electrification and/or non-emitting fuels.
  • Non-energy: Offsetting of unavoidable emissions only.
  • Net zero emissions target that includes all assets within an investment or lending product or portfolio
• Activities to reduce emissions supported by a detailed strategy or target.
• Activities without a detailed strategy or target that will reduce emissions.
• Generic expression of intent or no information.

This detailed analysis is an input into our assessment of net zero ambition, which considers broad emissions reduction commitments and strategies. We use the following categories to evaluate an organisation’s net zero ambition:

• Fully aligned: the organisation has a target to reach net zero by or before 2050 for all its direct and indirect emissions (scope 1,2 and 3), supported by interim targets and/or a comprehensive emissions reduction strategy, including a goal to only purchase offsets for unavoidable emissions.
• Closely aligned: the organisation has a target to reach net zero by or before 2050 for almost all its direct and indirect emissions (scope 1,2 and 3), supported by interim targets and/or a comprehensive emissions reduction strategy, including a goal to only purchase offsets for unavoidable emissions.
• Aspiration or on an Aligned Pathway: The organisation has either expressed an aspiration to achieve net zero emissions by or before 2050 for all its direct and indirect emissions OR has an interim target that will reduce its emissions on a trajectory aligned with this goal.
• Partially aligned: The organisation has a target aligned to net zero emissions by or before 2050 for a small proportion of its emissions.
• Not aligned: The organisation has made commitments, pledges or is undertaking activities that will reduce emissions but not in alignment with net zero before 2050.
• No emissions reduction targets or activities: No disclosed emissions reduction targets, commitments or activities.

If an organisation’s operational emissions (from owned and controlled sources) are only a small proportion of its overall emissions, we conduct separate evaluations of net zero ambition for initiatives and commitments that target operational emissions and for those that target the organisation’s primary emissions source (for example, portfolio emissions for banks, community emissions for councils). In the specific case of superannuation organisations, the evaluation of net zero ambition is based solely on initiatives and commitments that target portfolio emissions, since the operational emissions of these organisations are comparatively insignificant.