In the sphere of sustainability and corporate accountability, the Transition Pathway Initiative (TPI) emerges as a consequential force, providing invaluable guidance to businesses as they navigate the complexities of transitioning to the circular economy.

The TPI methodology sets a high standard, embodying a profound commitment to objectivity, transparency, and global applicability. A closer examination of TPI's methodology unveils a robust framework strategically designed to assist businesses in this transformative journey.

TPI adopts a two-dimensional approach, assessing companies based on publicly available information:

Assessment of Management Quality:

TPI conducts a rigorous examination of companies' management quality, evaluating against meticulously defined indicators. This comprehensive assessment covers crucial facets such as company policy adherence, emissions reporting and verification practices, target alignment, strategic risk assessment, and executive remuneration. The multifaceted scrutiny ensures a thorough evaluation of a company's dedication to implementing sustainable business practices, with due consideration for ESG factors, including ESG Reporting and ESG Data management.

Evaluation of Carbon Performance:

Utilizing modeling conducted by the International Energy Agency (IEA) for its Energy Technology Perspectives report, TPI meticulously evaluates companies' carbon performance. This model acts as the linchpin, translating international emissions targets into sectoral benchmarks using the Sectoral Decarbonization Approach. The resulting evaluation provides a nuanced perspective on companies' contributions to the low-carbon transition. This dual-layered assessment underscores TPI's commitment to providing a holistic and reflective evaluation of a company's environmental impact, integrating ESG considerations such as ESG Reporting and ESG Data management.

Beyond environmental metrics, TPI's evaluation of management quality extends to crucial strategic aspects. TPI offers insightful guidance for businesses aspiring to adopt circular economy principles by scrutinizing company policies, risk management protocols, and executive remuneration practices. This comprehensive approach ensures that TPI's assessments are a compass for organizations navigating the intricate landscape of circular economic transitions.