The Transition Pathway Initiative Centre (TPI Centre) has just released the new assessments under the TPI Management Quality (MQ) Framework, doubling the TPI company universe. We added 1,002 companies to the TPI universe, now totalling 2,000. The coverage now also extends to 24 sectors, up from 17 sectors in 2023.
For the second consecutive year, more than a half (55%) of the companies in the TPI universe are on MQ Level 3, indicating that the companies integrate climate change into operational decision-making. This reaffirms the notion that Level 3 functions as the new ‘par score’, characterising what may be considered normal for a company regarding its governance of greenhouse gas emissions and management of risks and opportunities arising from the low-carbon transition.
The data for both the old V4.0 and the current V5.0 are available for all companies on the
TPI Tool. The V5.0 was launched as Beta in 2023 with the new Level 5 indicators, which assess if a company uses its strategic understanding of climate and transition risk/opportunity to create a detailed and actionable transition plan which aligns business practices and capital expenditure decisions with their decarbonisation goals. Please refer to the “
TPI’s methodology report: Management Quality and Carbon Performance”.
Based on this year’s assessments, no more than 10% of the TPI universe companies score on any Level 5 indicator, and no company scores on all Level 5 indicators. Companies must meet all indicators to progress to the next level. This highlights the shortage of disclosure on the quantification of transition plans and alignment of company climate ambitions and capital expenditure plans.
In releasing this year’s data, the TPI Centre aligned non-core sector companies with the Industry Classification Benchmark (ICB) sector allocation by FTSE Russell, an LSEG business and the TPI data partner. This reallocation has primarily impacted companies previously classified as Consumer Goods, Other Industrials, and Services, along with those covered for the first time in 2024.
For a quick visual summary of the latest MQ data update, please refer to
this presentation.
The TPI Tool is supported by over 150 asset owners and asset managers globally and is created and managed by the TPI Centre at The London School of Economics and Political Science (LSE), academic partner of Transition Pathway Initiative.
For any questions related to the TPI data or methodology, please email:
tpi@lse.ac.uk
