2DII devised PACTA in order to address a major gap in analyses conducted by investors, who historically based their assessment of climate risk and impact on backward-looking carbon footprinting – which is now widely viewed as an incomplete methodology.
PACTA also helps investors implement the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), as well as comply with related regulations (Article 173 of France’s Law on Energy Transition for Green Growth, upcoming EU disclosure requirements, and more).
2DII began developing the PACTA tool in 2014, in partnership with academic organizations including the Frankfurt School of Finance and the University of Zurich, funding from the European Commission, German and Swiss governments, and support from UN Principles for Responsible Investment.
Access the online version of tool here: TransitionMonitor.com.
How it works
PACTA for investment portfolios has been available since 2018. As of June 2020, it has been used by over 1,500 financial institutions with more than USD 106 trillion in AuM, as well as by supervisors and central banks to assess their regulated entities (e.g. European Insurance and Occupational Pensions Authority (EIOPA), California Department of Insurance, Bank of England, and more).
In 2019, 2DII also started to develop PACTA for corporate lending portfolios, which is currently being tested by leading banks such as ING, Citi, UBS, etc.
Building off a vast climate-related financial database, the PACTA tool aggregates global forward-looking asset-level data (such as the production plans of a manufacturing plant over the next five years), up to parent company level. The tool then produces a customized, confidential output report, which allows investors to assess the overall alignment of their portfolios with various climate scenarios and with the Paris Agreement.