Crediting a long score with a medium term target

Methods
1

Good afternoon,

Where a company has committed to an ambitious medium term target, they often do not have long term targets. This is particularly relevant for net zero medium term targets - most companies will not have published targets for 2040 if they have already committed to net zero by 2030.

When calculating a long term score, where no long term target is set, should the medium term target be assumed as proactively applying?

Thanks,
Cassandra

2

Hi Cassandra,
Can we assume you are referring to a Temperature Score when you write score?

In the method (and implemented in the tool as well) there is a default temperature of 3.2 degrees that is used if a target is missing. So if the company lacks a long-term target, then the default temperature score is used. As a consequnce, the portfolio’s aggregated long term temperature score will be negatively affected by the lack of an explicit target. The midterm score is not affected by the lack of long term targets.

So the answer to your question is that the medium term target does not apply to the calculation of the long term score.

All the best,
Peter

3

Thanks very much Peter!