ACT fact sheet
Accelerate Climate Transition
Type : Implementation and monitoring of the action plan/ Evaluation
Date : 2015
Author : CDP and ADEME Target : Businesses
The climate emergency and the growing integration of carbon accounting into organisations' strategy show that it is essential toevaluate not only each organisation’s GHG emissions, but also their action plan.
In order to improve reporting on the action plan, and more generally, organisations' energy-climate transition, it seems useful to assess which strategy is being implemented and to what extent this strategy is aligned with low-carbon transition pathways (mapped for example by the IPCC, the International Energy Agency (IEA) and the work of IDDRI).
It is with this in mind that a new method developed in 2015 by CDP and ADEME, originally called “Assessing low Carbon Transition” (ACT®), was developed. To date, ACT® is the only international initiative that creates a framework of “climate accountability” for companies with respect to the2°C objective of the Paris Agreement. ACT® is presented in two parts: “ACT Step-by-Step” and “ACT Assessment”. The first allows the construction of a strategy aligned with relevant and ambitious low-carbon pathways, while the second enables its valuation by assessing its credibility and robustness.
What are the objectives of the approach?
ACT® aims to measure an organisation’s alignment with a future low-carbon world. These methods are produced from a framework, which enables the valuation of strategies compatible with a low-carbon transition pathway. ACT®, through its analysis, awards a rating intended to inform companies and investors, and indirectly public authorities, about the credibility of the low-carbon strategy. Through ACT®, companies are assessed according to sectoral criteria, in accordance with sectoral 2°C pathways of theIEA.
What is/are the target(s) of the approach?
“ACT Step-by-Step” and “ACT Assessment” are aimed at companies, investors, consultancies, federations and, to a lesser extent, public authorities. To ensure their adaptability to organisations of different sizes, ADEME and CDP piloted the ACT® methodologies with 23 large international companies and 30 French SMEs and mid-cap companies from the six major sectors of activity.
Today, there are 14 ACT® sectoral methodologies for: the automotive sector, electricity, retail, cement, transport, oil & gas, iron & steel, aluminium, paper & board, construction & property management, construction, glass, chemicals. A methodology described as “ Generic ” is applicable to a wide range of other sectors: mining, waste and water management, catering, information and communication, health, entertainment, public administration…
A methodology described as “ Generic ” is applicable to a wide range of other sectors: mining, waste and water management, catering, information and communication, health, entertainment, public administration…
It should be noted that the ACT “Generic” methodology differs from the ACT® sectoral methods by lacking a single unique framework due to the diversity of activities of the companies assessed. Unlike the sectoral methods that use emission intensity metrics based on physical units specific to each sector (such as tonnes of CO2e per tonne of cement), ACT “Generic” adopts a combination of strategies: use of mixed frameworks, selection from available sectoral frameworks, and, failing that, application of the Science Based Targets initiative (SBTi) absolute contraction approach to establish decarbonisation pathways.
Does the approach rely on a shared scientific basis?
The ACT® methods draw on work from, among others, the IEA, the French national low-carbon strategy (SNBC), SBTi and IPCC reports.
They are based on analysing specific points of the company’s strategy through 9 modules.
1) Target on reduction objectives
2) physical investments
3) intangible investments
4) management
5) performance of products sold
6) engagement with suppliers
7) engagement with customers
8) political engagement
9) the business model
Each module is then composed of several indicators. These modules and indicators are weighted according to sectors. The weighting was developed to reflect the relative importance of the modules in the low-carbon transition of different sectors.
Does the approach rely on a specific methodology?
The steps of the method ACT “Step-by-Step” (or ACT-S for “Step-by-Step”) are the following:
1) Current situation/initial diagnosis
2) Issues and challenges
3) Vision
4) New strategy
5) Action plan
In the case of a climate action, the action shall be “ClimATE-SMART”.
Clim = Climate impact: will the action lead to a low, medium or high reduction of GHG emissions?
A = Acceptable: is the behavioural change required by the action acceptable to the target stakeholders?
T = Transformative: will this action lead to some transformation of activities?
E = “Engaging”: will this action foster buy-in from the target interested parties?
The steps of the method ACT “Assessment” (or ACT-A for “Assessment”) are the following:
1) Performance rating
2) Narrative rating
3) Trend rating
4) Feedback report
The ACT® rating thus combines:
A score from 1 to 20 (Performance Rating)
A letter from A to E (Assessment Rating: the company is more or less well prepared for the transition to a low-emission economy)
A sign (Trend Rating: + (improvement), - (deterioration) and = (stable))
For companies and particularly SMEs and mid-caps, ACT® can therefore take the form of a method to structure their low-carbon transition strategy, indicating through its ratings of the various criteria the points to prioritise to define and ensure the continuity of their organisation’s strategy.
The scope of the ACT® methodologies resembles an organisational boundary. However, it differs from that of GHG inventories, for which organisational boundaries are based on a control/ownership approach of GHG sources and sinks. The ACT® scope thus potentially encompasses all of a company’s activities and its entire value chain.
The temporal boundaries for a given sector are determined by the need for past, present and future information on the organisation. The degree of past information to include is determined by what is necessary to infer the required trajectory for an appropriate assessment.
The methodologies aim to include all significant sources of direct and indirect emissions (including scopes 1, 2 and 3) in order to faithfully reflect a substantial share of the organisation’s total emissions.
The reporting boundaries of the ACT® methods for a given sector are defined according to the main emission sources of that sector, following the relevance principle (“relevance”). This leaves organisations some latitude to adapt these boundaries to their specific sector of activity. Each ACT® method specifies a detailed list of emission sources to be taken into account, including those that are mandatory and those that are optional. For example, in the ACT “Generic” methodology, direct emissions from land use, land-use change and forestry (LULUCF) are considered optional.
The ACT® methodologies have been expanded since their creation with the addition of new sectoral methodologies. Currently, the sectoral method on agriculture & agri-food as well as a new method on biodiversity issues are in the pilot phase and will soon be integrated into the ACT® methodology catalogue. In addition, a new ACT methodology dedicated to “ Adaptation actions ” has recently been developed and is the subject of a dedicated fact sheet.
Does the approach rely on tools?
Excel methods and tools for data collection and scoring have been developed for each of the sectoral methods.
The ACT “Step-by-Step” method relies on two toolboxes:
a Strategy toolbox (which includes 4 types of resources, notably a SWOT matrix to assess the strengths, weaknesses, opportunities and threats of the organisation’s action plan)
a Carbon Performance toolbox (which consists of a main tool dedicated to defining and understanding carbon performance indicators)
Can other low-carbon transition methods and tools be used to achieve the objectives of this approach?
In order to be able to start ACT® processes, the organisation shall have carried out at least one organisational GHG inventory within the last two years. They therefore build on an assessment carried out using internationally recognised methods, such as ISO 14064-1, the GHG Protocol or Bilan Carbone®. The ACT® methods thus make it possible to start, or continue, reflection on the transition plan in the form of concrete actions (reduction potential, definition of monitoring, pilot, resource needs, financing, stakeholders). The ultimate objective being to test the robustness and alignment of this plan with the objectives set by the Paris Agreement.
Other initiatives address the same issues as ACT®, such as The Transition Pathway Initiative, which uses public documentation to assess organisations, or the SBTi methods. ACT® has the advantage of being a sectoral, transparent approach based on company data (public or verifiable).
Does it allow third-party recognition? If so, in what way?
After several months of evaluation, the organisation receives the following elements:
A detailed explanation of the information used for the evaluation.
A summary of the results obtained.
Recommendations to improve its GHG reduction strategy and adopt best practices.
A list of consultants and evaluators is proposed to support organisations in their ACT “ Step-by-Step ” and ACT “ Assessment ”.
Attention, the result of the initial diagnosis of ACT “Step-by-Step” does not necessarily reflect the score obtained within ACT “Assessment”. The organisation shall be subject to a specific ACT “Assessment” audit to obtain the correct corresponding score.
Can this approach be harmonised with other international frameworks?
Versions of ACT® have been developed internationally through local programmes, notably in Latin America through the ACT-DDP project ACT-DDP (ACT-Deep Decarbonisation Pathway) and in Japan, with the aim of supporting the country’s neutrality ambition.
In 2024, France represents 1/4 of the organisations that have undertaken an ACT® process.
The sheets of the Overview of carbon accounting methods and tools are the result of a synthesis by ABC. We remain open to your feedback or questions on this form.
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