PACTA: Open-Source Climate Transition Risk Analysis Tool
Discover PACTA, an open-source tool for analyzing climate transition risks and opportunities in financial portfolios, aligning with climate scenarios and goals.
What is PACTA?
PACTA (Paris Agreement Capital Transition Assessment) is an open-source, free tool that enables financial institutions to measure the alignment of their portfolios with climate scenarios and goals. It was developed by an international group of organizations including 2° Investing Initiative, the Frankfurt School of Finance & Management, and UNEP Finance Initiative.
The key features and capabilities of PACTA include:
- Assessing portfolio alignment with climate scenarios like the Paris agreement goal to limit global warming to 1.5°C or well below 2°C.
- Analyzing exposure to climate policy risks and low-carbon transition opportunities across different sectors and asset classes.
- Scenario analysis capabilities covering several sectors including power generation, fossil fuel extraction, automotive, shipping, aviation, steel and cement.
- An open-source methodology that is transparent, peer-reviewed and based on the best available climate scenarios.
- Supporting disclosure and adoption of TCFD recommendations related to climate risks and opportunities.
- Ability to handle large, complex multi-asset portfolios across equities, bonds and loans.
- Outputs oriented towards strategic decision making by banks, investors and policy makers.
By leveraging PACTA, financial institutions can better understand and disclose climate related risks, support the transition towards a low carbon economy, and align lending and investment decisions with climate goals.