CICERO Shades of Green Company Assessments

CICERO Shades of Green presents a novel method- ology for climate risk assessment of companies. We WE NEED TO KNOW WHICH COMPANIES ARE explicitly link environmental and financial by assigning POSITIONED FOR THE FUTURE. BY USING a Shade of Green to a company’s revenues and invest- SHADES OF GREEN, IT HAS MADE IT EASIER FOR ments. US TO COMPARE COMPANIES AND UNDERSTAND TRANSITION AND RISK. WITH THE NEW COMPA- The approach includes an assessment of corporate NY ASSESSMENTS, WE GET WHAT WE NEED AS governance and an analysis of likely alignment with the AN INVESTOR IN ORDER TO FINANCE THE EU Taxonomy. The CICERO Shades of Green Compa- TRANSITION. ny Assessments enable the financial sector to include climate risk assessment into investment decisions and METTE CECILIE SKAUG, PORTFOLIO MANAGER, OSLO PENSJONSFORSIKRING track companies’ transition efforts.

Shades of Green - our approach

The Shades of Green methodology is rooted in CICERO Center for International Climate Research’s climate science and is used to assess climate risk in the financial market. This method is focused on avoiding lock-in of greenhouse gas emissions over the assets’ lifetime and on promoting transparency in resiliency-planning and strategy.

CICERO Shades of Green allocates a shade of green, yellow or red (see figure below) to revenues and investments depending on how well they are aligned with a low-carbon, climate resilient future.

The Shades of Green assessment also provides investors and lenders with analysis on the likely alignment to the EU Taxonomy, including a review of the do no significant harm (DNSH) criteria and a high-level review of minimum safeguards.

In addition to the shading, CICERO Shades of Green also includes a governance score to show the robustness of the governance structure, including an assessment of how companies respond to the TCFD recommendations on climate risk. The Shades of Green assessment report also includes key performance indicators to make it easier for investors to compare progress.

E-mail: [email protected] Website: cicero.green Twitter: @CICERO_Green

Climate science-based rating method

CICERO Shades of Green is a leading provider of independent, research-based evaluations of green bond investment frame- works to determine their environmental robustness.

CICERO Shades of Green’s second opinions and company assessments build on renowned climate research, drawing on competence from CICERO Center for International Climate Re- search, one of the world’s foremost institutes for interdisciplinary climate research.

Thanks to this unique rating method, CICERO Shades of Green has received several awards from investors rec- ognizing the quality of its green bond ratings and is holding its position as the largest external reviewer by volume globally.

The methodology for company assessments was developed under the Sustainable Edge research project, together with CICERO and financial sector partners. This project also developed climate risk assessments of sectors.

The company assessment reports may be relevant for: • Companies seeking an external opinion on their activities for listing on stock exchanges or a green equity announcement.

• Investors seeking to understand the climate risk of their portfolio companies.

• Companies preparing to report in accordance with the EU Taxonomy.

SHADES OF GREEN PROVIDES VALUABLE ADDITIONAL INFORMATION TO THE EU TAXONOMY. I SEE A CLEAR ROLE FOR SHADES OF GREEN GOING FORWARD.

BERNHARD MAURITZ STORMYR, VICE PRESIDENT SUSTAINABILITY, YARA

E-mail: [email protected] Website: www.cicero.green Twitter: @CICERO_Green