Modelling Principles

Core principles underlying PACTA

Market share approach

The PACTA model calculates the expected benchmark exposure for each technology in the specific asset class by taking the current exposure in the respective asset class and geography and adding the trend line as defined in the scenario. The build-out percentages take a simple “market share approach“ under which the companies in the investable universe are assumed to adjust production capacity in line with the scenario, consistent with their market share.

5-year Time Horizon

The model assesses the scenario alignment of financial portfolios with a 5-year time horizon/forecast period. The time horizon is limited to the time horizon of capital expenditure planning for which data can be tracked at a meaningful level. While this time horizon may differ across sectors, a homogenous time horizon is taken to allow for the comparability of results.

Forward-looking Data

The model sources, where possible, forward-looking asset based company-level data for key technologies in order to provide for geography-specific assessments. This bypasses backward-looking, corporate level reporting, although such reporting can be used for validating forward-looking parameters (e.g. GHG emissions).