Emissions Reductions data considers all 3 emissions scopes for the purposes of Potential Carbon Liability. The reductions have now been capped at 0, meaning increases in emissions are not accommodated, even if the asset is performing under-budget for carbon emissions. This enforces a focus on risk of not reducing, not reward for the potential to increase emissions to match a budget.

The 5 carbon budget metrics now calculate total metric reductions using tonnes of reduction across all scopes, which better reflects company’s real reductions requirements. Previously we had used scope weighted average, which applied a weighted average reduction percentage across all three scopes.

PCL incorporates an aggregate (weighted average) of both the 5 carbon budget metrics, and 7 additional financial resilience metrics to generate a carbon budget, bringing it to a total of 12 metrics considered when creating the final PCL calculation.

• Adjusted EBITDA vs EV multiple, to assess Enterprise Value erosion

• Adjusted earnings to Price earnings ratio, to assess Market Cap erosion

• Dividend erosion, to assess the asset’s continued ability to pay dividends

• Debt to EBITDA, to assess the asset’s continued ability to service its debt

• EBIT coverage ratio, another way assess the asset’s continued ability to continue to service its debt

• Assets to liabilities, to assess the asset’s ability to pay its liabilities with its assets

• Cashflow from operations, to assess how affected the asset’s cashflow would be