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What is the
Climate Transition Assessment?

The Climate Transition Assessment (CTA) is a qualitative opinion on where a company is on its current transition journey and where we expect it to head into the future, based on an assessment of planned transition activities and implementation drivers.

The CTA outcome is a single Future Shade, based on the award-winning Shades of Green approach, which shows the expected alignment of a company’s activities with a low carbon, climate resilient future (and alignment with the Paris Agreement), based on the feasible transition timeline for the company’s sector and its own transition plan/commitments.

How does the Climate Transition Assessment differ from a net zero target assessment?

The CTA is not a net zero assessment. Whereas many net zero targets are distant, reaching as far as 2050, the Climate Transition Assessment analyzes near-term actions and investments that the company has planned, and their likely implementation, considering potential risks and blockers.

The CTA can be applied across sectors and all starting points along the climate transition spectrum, including those earlier in their transition journey, and provides a forward-looking opinion based on a company’s transition plan.

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Our Approach

A Climate Transition Assessment is our qualitative opinion of how consistent with a low carbon, climate resilient future we expect an entity's economic activities will be once the entity's planned transition changes are realized and potential material implementation risks are considered. We express our opinion using a single Shade of Green ranging from Dark Green to Red.

Our CTA analysis includes three elements: 

1. Current Activity

2. Climate Transition Plan

3. Future Shade (based on the Shades of Green spectrum)

Optional Add-Ons: In addition, and upon request from the company, we can assess consistency with green and transition equity designations with certain stock exchanges (e.g.: Nasdaq) and other frameworks.

Our CTA reports also include an analytical summary of strengths, weaknesses, and areas to watch.

Learn more about our Analytical Approach and the Shades of Green

  • Analytical Approach: Climate Transition Assessments

    Read more

  • Analytical Approach: Shades of Green Assessments

    Read more

  • FAQ: Applying Our Integrated Analytical Approach For Climate Transition Assessments

    Read more

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Use Cases for the Climate Transition Assessment

  • Financing - Debt

    Demonstrate your company’s transition readiness to obtain sustainability or transition financing. Use the CTA either for labeled debt, in combination with a Second Party Opinion, or for unlabeled debt to demonstrate your commitment to transition at entity-level.

  • Obtaining a Green Designation on Stock Exchanges

    Companies seeking to obtain a green designation on certain stock exchanges (e.g.: B3 Ações Verdes (BAV), Nasdaq Green Designations, or SIX 1.5°C Climate Equity Flag), either when going public as a green equity offering or as a listed company to help provide transparency on their green business models, status and strategies to investors, business and other stakeholders.

  • Before an IPO Announcement

    Companies seeking an external opinion, where relevant, on their activities for listing on stock exchanges or a green equity or Initial Public Offering (IPO) announcement.

  • Investor and Stakeholder Communications

    Demonstrate the robustness of your transition plans in your communications to investors and other stakeholders, particularly for companies in transitioning sectors.

  • Qualitative Climate Transition Risk Analysis

    Provide a qualitative, deeper dive opinion for investors and banks/financial institutions seeking to understand the climate risk of their portfolio companies, including the transition ambition and plan of a particular company.

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Green Equity Exchange Designations

  • Approved Reviewer for Green Equity Exchange Designations

      S&P Global Ratings is currently an approved reviewer for three major stock exchanges' green equity designations: B3 Ações Verdes (BAV), Nasdaq Green Designations, and the SIX Swiss Exchange 1.5°C Climate Equity Flag.

  • B3 Ações Verdes (BAV) Green Equity Designation

    Download the Climate Transition Assessment Description for the B3 Ações Verdes (BAV) Designation

      S&P Global Ratings is the first approved reviewer for the B3 Ações Verdes (BAV). In May 2024, B3 The Brazilian Stock Exchange launched a voluntary B3 Green Equities (BAV) designation targeting green companies in Brazilian markets, based on the World Federation of Exchanges Green Equity Principles. The B3 Ações Verdes (BAV) Designation provides transparency to investors on green credentials of a company and offers a way to follow a company’s progress over time.

      Our Climate Transition Assessment evaluates alignment with the B3 Ações Verdes (BAV) principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of annual gross revenue from activities that contribute to the green economy and continue to invest in a majority share of green activities.

  • Nasdaq Green Designations

    Download the Climate Transition Assessment Description for the Nasdaq Green Designations

      S&P Global Ratings is currently an approved reviewer for Nasdaq Green Equity Designations and has provided stakeholder input to the development of the designation principles. In June 2021 Nasdaq launched voluntary Green Designations targeting green and transition companies on Nasdaq Nordic markets. The Nasdaq Green Designations provide transparency on the green credentials of a company and offer a way to follow a company’s progress over time.

      Our Climate Transition Assessments evaluate alignment with the Nasdaq Green Equity and Nasdaq Green Equity Transition Designations principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of turnover from green activities and continue to invest in a majority share of green activities, in addition to providing transparency on EU Taxonomy alignment and company-level sustainability targets.

  • SIX 1.5°C Climate Equity Flag

    Download the Climate Transition Assessment Description for the SIX 1.5°C Climate Equity Flag

      S&P Global Ratings is one of the first approved reviewers for the SIX 1.5°C Climate Equity Flag as of August 2024.

      In August 2024, the SIX Swiss Exchange launched the SIX 1.5 °C Climate Equity Flag, which helps companies provide additional supporting evidence that its entire value chain contributes towards limiting global warming to 1.5 °C above pre-industrial level. The flag combines recognized requirements on the climate transition plan with additional requirements that arise from the application of the WFE Green Equity Principles (2023) to climate-change mitigation.

      Our Climate Transition Assessment evaluates alignment with the SIX 1.5°C Climate Equity Flag. To meet the SIX 1.5°C Climate Equity Flag requirement, more than 50 percent of the issuer’s annual revenues must come from 1.5°C aligned activities.

Climate Transition Assessments - Public Reports
VIEW ALL PUBLIC REPORTS

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