Assessing and validating corporate low-carbon transition strategies: A comparative analysis of approaches and methodologies

Independent assessments and validations of corporate low-carbon transition strategies offer valuable insights for investors, governments, and other stakeholders. However, inconsistencies in assessment outcomes for the same companies raise questions about the differences between methodologies. This article addresses this issue by analysing the methodological design choices of ten regularly updated corporate low-carbon transition strategy assessments with publicly available methodologies and results. These include the Science Based Targets initiative and the Transition Pathways Initiative. We developed a framework to assess initiatives’ overall assessment set-up, selection of criteria, and the depth and transparency of criterion-specific assessment. To illustrate the differences, we compare assessment outcomes for a major global company. Our findings reveal heterogeneity in key assessment parameters, notably in component coverage, weighting and the assessment depth and transparency per criterion. Most initiatives assess greenhouse gas mitigation targets, but their assessment depth and transparency vary. Other criteria, such as the companies’ approach to residual emissions, board oversight, and consideration of just transition, were found to be covered by considerably fewer assessments. These methodological differences reflect trade-offs in breadth, depth, and analysis frequency. No single assessment initiative provides comprehensive, in-depth and consistently up-to-date assessments for more than 1000 companies. However, composite assessments, which integrate multiple assessments as sources, are emerging as an approach to addressing gaps in criteria coverage while maintaining the depth of assessment for each criterion. This article recommends that users of assessment outcomes interpret them in the context of their underlying methodology critically, considering their unique purposes, strengths and limitations.