Moody’s Investors Service, a provider of credit ratings, research and risk analysis, has announced the release of its first Net Zero Assessment (NZA), its new scoring system designed to enable investors to assess companies’ decarbonization plans and actions. evaluate and compare.
The new NZAs, which were officially launched last year, provide an assessment of the strength of a company’s carbon emissions reduction profile against a global net-zero trajectory consistent with the most ambitious targets of the Paris Agreement, taking into account the entity’s ambitions, as well as its plan and governance around emissions reductions. The NZAs use a five-point scale from NZ-1 (highest score) to NZ-5 (lowest score).
For its first NZA, Moody’s awarded Italian energy infrastructure provider Snam’s climate transition plan a score of ‘NZ-3’ or ‘significant’, rating the company’s ambition as ‘well below 2°C’, in consistent with the objectives of the Paris Agreement. and its implementation as “solid”, with its action plan for Scope 1 and 2 emissions, based on proven and easy-to-scale technology, but partially offset by implementation hurdles for Scope 3 emissions, including having a relatively high share of emissions arising from sources that are difficult to control.
Brian Cahill, Global Head of ESG at Moody’s Investors Service, said:
“Market participants face significant challenges when comparing companies’ decarbonization plans due to inconsistent disclosure requirements, differences in the scope, coverage and timing of targets, as well as differences in companies’ ability to implement their business transformation plans and achieve stated goals. NZAs provide an independent and comparable assessment of an entity’s emissions reduction profile, helping market participants better understand the relative positioning of non-financial companies in their transition to a low-carbon future.”