Low Carbon Transition Ratings Leader Badges Methodology

This document is a technical report detailing the methodology for the Low Carbon Transition Ratings (LCTR) Leader Badges developed by Morningstar Sustainalytics. The LCTR Leader Badges are designed to identify entities that exhibit leading performance in managing the transition to a low carbon economy by 2050. The methodology incorporates a rule-based screening process that evaluates management preparedness alongside other transition efforts. It outlines the criteria for eligibility, which include demonstrating alignment with net zero temperature goals, disclosing greenhouse gas emissions data, outperforming peers in decarbonization efforts, and having no involvement in significant controversies related to low carbon transition. The report further explains the scope of the assessment, which encompasses publicly listed and large privately held companies across various industries and regions. It also discusses the limitations of the assessment, emphasizing the reliance on publicly available data and the qualitative nature of certain judgments involved in the evaluation process.