About the Project
Welcome to the Climate Alignment Pilot Test homepage. This initiative is part of the Paris Agreement Capital Transition Assessment (PACTA) project, designed to measure 2°C alignment in financial markets. It provides information on potential participation in the project, as well as background research material, information, and links around the topic of Paris Agreement and financial markets.
What is the Climate Alignment Test?
The climate alignment test is a method to measure the alignment of financial portfolios with the 2°C decarbonisation pathways. The model consists of 3 key elements.
- Scenarios, 2°C scenarios that form the basis of the analysis and define the benchmark against which portfolio trends are compared
- Financial portfolios and associated financial data to allow for the portfolio assessment.
- Forward looking economic ‘asset level data’ that is mapped to companies, parents, and securities. This allows the link between financial portfolios and industry and production data (oil and gas production, automotive production, utilities) to be established.
Since launching the assessment, 100 investors across 16 countries have committed to testing their listed equity portfolios, testing approximately $350 billion USD of equity, as well as 20 investment products.
Why should you participate?
Participating in the climate alignment pilot test provides a number of benefits:
- Free and confidential assessment of how your listed equity and corporate bonds portfolios compare to a 2°C transition (as defined by the IEA);
- Insight into how your climate policies compare to your peers;
- A better understanding of potential capital misallocation and potential associated financial risk under 2°C transition;
- Aligning with the Financial Stability Board Task Force on Climate-Related Financial Disclosures recommendations on 2°C scenario analysis.
If you have any further queries, don't hesitate to contact us.