Ranking Overview

The ET Carbon Rankings serve the twin purpose of encouraging disclosure and verification through making this data more publicly accessible; while also laying the foundations for the ET Index Series, a market mechanism designed to operate globally and emissions reductions within a rapid time-frame.

The ET Carbon Rankings are based on the following core principles:

- Data used in the Rankings must be publicly available and therefore fully transparent.

- In order to address the issue of climate change, the Rankings’ primary objective must be to encourage emissions reductions across all sectors and all Scopes.

- Data which has been verified by an independent third party will always be ranked above data which has not.

- Companies honest enough to disclose their total emissions across all Scopes must not be penalised for doing so relative to those who fail to disclose.

- In order to be fully effective, the Rankings must take into account the full scope of a company’s carbon emissions, including Scope 3 (supply chain) emissions.

The Ranking methodology orders companies into four categories according to their emissions reporting standards: public, complete & verified; public, complete & unverified; public, incomplete (verified or unverified); and, no public data. Where data is incomplete or not reported, companies are benchmarked against their sectoral competitors using the highest reported emissions intensity for that sector. The purpose of this ‘inference process’ is to avoid penalising companies honest enough to report large but accurate emissions figures.

Companies in each category are then ranked according to their emissions intensity (emissions tCO2e/$M turnover). Ranking companies according to emissions intensity is intended to make the Rankings comparable even though the companies making up the Ranking vary in size.

The GHG protocol provides a full explanation of the methods companies use to cover these different types of direct (Scope 1) and indirect (Scope 2 and 3) emissions. A combined Scope 1, 2 and 3 total, when externally verified to an agreed international standard, is a solid basis for a Carbon Ranking.

Given the non-standardised nature of greenhouse gas (GHG) emissions reporting across different geographies and industries, the task of correctly identifying a company’s emissions across Scope 1, 2 & 3 as defined by the GHG Protocol is not an easy one. The methodology section is intended to explain the process by which the EIO carries out its work within this context in order to produce a set of Rankings which are as robust as possible.

The GHG protocol provides a full explanation of the methods companies use to cover these different types of direct (Scope 1) and indirect (Scope 2 and 3) emissions. A combined Scope 1, 2 and 3 total, when externally verified to an agreed international standard, is a solid basis for a Carbon Ranking.