Previously called the Methodology and Indicators report, this document provides the technical background to the assessments, with a focus on the new MQ methodology
The TPI methodology report: Management Quality and Carbon Performance - version 5.0 provides the latest technical framework for assessing how companies are managing climate change and aligning with global climate goals, including the Paris Agreement. The methodology enables investors to evaluate corporate preparedness for the transition to a low-carbon economy using a transparent and consistent set of indicators.
The framework is built around two complementary pillars: Management Quality and Carbon Performance. Management Quality evaluates companies’ governance of emissions and their management of climate-related risks and opportunities, such as policies, disclosures and targets while Carbon Performance benchmarks companies’ emissions pathways against sector-specific decarbonisation pathways aligned with climate scenarios.
Version 5.0 introduces significant enhancements to the methodology, including an expanded Management Quality framework with additional indicators and a new highest level assessing whether companies have credible, financed transition plans aligned with net zero. It also broadens company coverage and strengthens the assessment of areas such as Scope 3 emissions disclosure, improving the robustness and relevance of TPI’s analysis.
Based entirely on publicly disclosed data, the methodology ensures transparency, objectivity and comparability across companies and sectors. This 2023 update represents a major evolution of TPI’s core framework, supporting investor engagement, portfolio analysis and decision-making on corporate climate performance and transition risk.