PACTA for Investors

Green finance (1)

About PACTA for Investors

In September 2018, the 2° Investing Initiative (2DII) introduced the Paris Agreement Capital Transition Assessment (PACTA) tool: a free software that calculates the extent to which corporate capital expenditures and industrial assets behind a financed through equity, bond, or lending portfolio are aligned with various climate scenarios. The first-of-its-kind software taps into a vast climate-related financial database, which covers more than 30,000 securities, 40,000 companies, and 230,000 energy-related physical assets.

2DII began developing the PACTA tool in 2014, in partnership with academic organizations including the Frankfurt School of Finance and the University of Zurich, funding from the European Commission, German and Swiss governments, and support from UN Principles for Responsible Investment. PACTA for Investors can be applied by asset owners, asset managers, retail investors, researchers, or anyone with a list of ISINs. Since the tool was launched, more than 4,500 individuals from more than 3,000 institutions have used it to conduct over 18,000 tests, with an average of 600+ tests per month. Overall, the total assets under management of financial institutions using the tools amounts to more than USD 106 trillion.

Building off the vast climate-related financial database, the PACTA tool aggregates global forward-looking asset-level data (such as the production plans of a manufacturing plant over the next five years), up to parent company level. The tool then produces a customized, confidential output report, which allows investors to assess the overall alignment of their portfolios with various climate scenarios and with the Paris Agreement. You can apply the tool here.