# What is PACTA?

**The Paris Agreement Capital Transition Assessment (PACTA)** is a climate scenario analysis methodology. It measures the alignment of financial portfolios to climate change scenarios, including Paris aligned scenarios, across climate critical sectors. PACTA is aimed at informing transition risk with the ultimate goal of driving emissions reductions in the real economy. 

PACTA bases its assessment of portfolio alignment to a climate scenario on forward-looking production values, which are measured in economic units of output in the real economy. It is thus distinguished from purely carbon accounting frameworks, which are often based on historic data. Despite this distinction, PACTA can be used as an input into carbon accounting frameworks, with the use of emission factor models, and can complement such frameworks in their own right. 

PACTA is an open source iterative methodology. Designed in consortium with academic institutions, industry initiatives, not for profits and financial. It has received funding from the EU Life Programme, International Climate Initiative (IKI) and Germany's Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. 

On the [Transition Monitor](http://www.transitionmonitor.com/) website, individual users can perform PACTA analysis for listed equities and corporate bonds using free, online software [**here**](https://www.transitionmonitor.com/participate/). The website also hosts materials for a bank wishing to run the PACTA analysis on their corporate lending portfolios. This can be accessed at the [PACTA for Banks tab](https://www.transitionmonitor.com/pacta-for-banks-2020). This methodology was road tested in consortium with 18 major international banks. 

Since the tool was launched on [TransitionMonitor.org](https://www.transitionmonitor.com), more than 3,000 individuals from over 1,500 institutions have used it to conduct over 10,000 tests. 

{% hint style="success" %}
Transition risks are risks generated by the policy, technology, market, and regulatory changes likely to accompany the transition to a low carbon economy.
{% endhint %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://rmi.gitbook.io/pacta-knowledge-hub/introduction/pacta.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.