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Definitie

Implied temperature rise

Implied temperature rise is a modelled estimate, expressed in degrees Celsius, of the warming associated with an entity's or portfolio's projected emissions path relative to a chosen climate benchmark.

What is implied temperature rise?

Implied temperature rise (ITR) translates an entity's emissions target or projected emissions path into a temperature score, usually stated in degrees Celsius above pre-industrial levels. Under the CDP-WWF Temperature Scoring Methodology version 1.5, a score first calculates the target's compound annual reduction rate. This is the average yearly percentage decrease needed to move from the starting emissions level to the target. The method then compares that rate with benchmarks built from about 1,200 vetted scenarios in the IPCC Sixth Assessment Report database to estimate warming in 2100. It is a model comparison, not a prediction of the temperature one company will cause.

Why does implied temperature rise matter to you?

An investor or lender may use ITR to compare investees, choose engagement priorities, or track a portfolio target. SBTi's July 2025 Financial Institutions Net-Zero Standard implementation list accepts CDP-WWF version 1.5 and MSCI's February 2024 ITR method for specified climate-alignment targets. The list also warns that eligible methods can produce different scores because they use different scenarios, sector mappings, time periods, data and tests of target credibility.

A financial institution using SBTi's Near-Term Criteria version 2.0 must set:

  • A separate portfolio temperature target for Scope 1 and Scope 2 that follows a linear path by 2040 to a scenario at least as ambitious as 1.5°C.
  • A separate portfolio temperature target for Scope 1, Scope 2 and Scope 3 that follows a linear path by 2040 to a well-below 2°C scenario.

Keep this information beside each result:

  • The provider, method version and benchmark.
  • The scopes, score date and portfolio coverage.
  • The weighting method and share of default scores.

These requirements come from criterion FI-C17.3.

How is implied temperature rise calculated?

The exact calculation depends on the method. CDP-WWF version 1.5 first converts a valid public GHG target into a compound annual reduction rate. Its warming functions compare that rate with vetted scenarios from the IPCC Sixth Assessment Report. The method produces separate scores for Scope 1, Scope 2, Scope 3 and permitted scope combinations within short-, medium- and long-term periods. A company without a valid target receives a 3.4°C default score under section 5.3.

At portfolio level, section 7.2 offers seven weighting options. The simplest, weighted average temperature score (WATS), is the sum of each holding's portfolio weight multiplied by its company score. Other options weight scores by total emissions or an ownership-based share of emissions. State the option and coverage before comparing two portfolios.

What mistakes should you avoid?

  • Presenting a 2.1°C score as a precise forecast rather than a model result.
  • Comparing scores from different providers without matching the model version, benchmark, scopes and time period.
  • Hiding the percentage of portfolio value or portfolio GHG emissions assessed using the 3.4°C default score or estimated data.
  • Using ITR alone as proof of current emissions performance or a credible transition plan.

Is implied temperature rise the same as climate scenario analysis?

No. ITR converts a target or projected emissions path into one alignment score. Climate scenario analysis tests how several plausible futures could affect operations and finance. One does not replace the other.

Can two providers give the same company different scores?

Yes. Check the scenario set, sector pathway, emissions data, target-validity rules, Scope 3 treatment, default score and end year. Record a method change as a break in the series; FI-C17.3 requires a financial institution to re-baseline if it changes its temperature-score source during the target period.

What should you send when an investor asks for ITR?

Send the entity and portfolio scores with their as-of date, method and version, benchmark, scopes, time period, weighting formula, holdings coverage, share based on public targets, share using defaults, and key exclusions. Include the target records and emissions data used so the investor can reproduce the stated inputs.

Example

Suppose a Philippine investor applies the CDP-WWF version 1.5 WATS option to two hypothetical food and beverage processors. It invests PHP 4 million in Processor A, which has a modelled company score of 2.7°C, and PHP 6 million in Processor B, which has a modelled score of 1.8°C. The stated scores are hypothetical model outputs; this example tests only the portfolio aggregation.

Total investment is PHP 10 million. Processor A's weight is PHP 4 million / PHP 10 million = 40%. Processor B's weight is 60%. Portfolio ITR is (40% x 2.7°C) + (60% x 1.8°C) = 1.08°C + 1.08°C = 2.16°C.

If Processor A is later rescored at 2.0°C after publishing a valid target, with investment values and Processor B's score unchanged, the portfolio result becomes (40% x 2.0°C) + (60% x 1.8°C) = 0.80°C + 1.08°C = 1.88°C. The change is 2.16°C - 1.88°C = 0.28°C. The investor must still disclose the method version, scopes, score date, target coverage and any default scores.

Where it comes up

SBTi eligible implied temperature rise methods for portfolio climate-alignment targetsFinancial Institutions Net-Zero Standard Provisional Implementation List, section 1.1 and Table 1Official sourceSBTi portfolio temperature rating target ambition, method, weighting and data-consistency rulesFinancial Institutions' Near-Term Criteria version 2.0, FI-C17.3Official sourceCDP-WWF company temperature scores, portfolio weighting options and limitationsCDP-WWF Temperature Scoring Methodology version 1.5, sections 1.1-1.3, 5.3, 7.2 and 8.1Official source

Related terms

Science-Based Targets

A science-based target states how quickly a company will cut greenhouse gas emissions in line with a climate pathway accepted by the Science Based Targets initiative (SBTi), using a defined boundary, base year and target year.

Climate scenario analysis

Climate scenario analysis tests how your strategy, business model and financial performance could change under several plausible climate futures, including physical hazards and policy, market and technology shifts.

Financed emissions

Financed emissions are the share of a borrower's or investee's gross GHG emissions allocated to a bank, fund or asset owner through the loans and investments it holds.

Weighted average carbon intensity (WACI)

Weighted average carbon intensity (WACI) measures a portfolio's exposure to carbon-intensive companies by weighting each holding's Scope 1 and Scope 2 emissions per million of revenue by its share of portfolio value.

Portfolio climate alignment

Portfolio climate alignment uses a defined forward-looking metric to assess whether holdings, loans or underwriting activities are moving toward a stated climate pathway, with the method, benchmark, time horizon and weighting rule clearly disclosed.

Sources

Sources checked 2026-08-19

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Implied temperature rise Definition | Keslio