Sustainable Fitch, a FitchSolutions company, has launched an expanded Transition Assessment analytical product, through the development of new sector-specific methodologies, covering additional hard-to-abate sectors – mining, steel and cement.

This is in addition to the Transition Assessment covering energy (oil and gas and power generation).

The Transition Assessment is an opinion on the ambition, credibility and implementation of entities’ climate transition plans in hard-to-abate sectors.

The assessment is aimed at helping companies and investors benchmark and differentiate between companies on their progress towards net zero using a transparent methodology, with consistent and comparable scoring and indicators.

In developing the new methodologies, Sustainable Fitch says it has applied sector-specific emission pathways and decarbonisation considerations for mining, steel and cement.

The assessment is primarily a quantitative analysis, with thresholds for scoring forward- and backward-looking indicators calibrated using benchmark climate scenarios.

It also incorporates qualitative elements and analyst judgment, Sustainable Fitch explains.

The analysis output is a colour-coded scale (black, brown, light brown, olive, light green and green), with qualifiers added for further nuance. Outcomes are equivalent across sectors.

Each colour represents an intermediate stage in a company’s transition journey, with greener tones indicating more ambitious targets and progress on implementing a successful plan to transition to net zero as demonstrated by falling emissions and business transformation.

Sustainable Fitch's methodology assesses climate targets and transition plans against net zero by 2050 climate scenarios; however, necessary adjustments can be made if the entity is based, or largely operates, in an emerging market, the company points out.

It builds on the transition framework developed by the Sustainable Markets Initiative and its Energy Transition Task Force.