1. About the X-Degree Compatibility (XDC) Model

The X-Degree Compatibility (XDC) Model is an economic climate impact model, calculating the temperature alignment of an economic entity, such as a company, a building, a sovereign, or a portfolio. It analyses the degree of global warming that an economic entity is compatible with under various scenarios, answering the question: “How much warming could we expect if the entire world performed as well as this particular entity?” , with performance measured with respect to a sector-specific economic emissions intensity (EEI) benchmarks. Results are expressed in a tangible degree Celsius (°C) number: the XDC.

To the best of our knowledge, the XDC Model is the only temperature alignment methodology to use an iterative climate model (Finite Amplitude Impulse Response, FaIR [1] [2]), i.e. one that updates the state of the climate system for each year of input emissions and considers multiple different gases explicitly. There are many advantages to this approach, one of which is the ability to quantify the different impacts of early mitigation of emissions versus later use of negative emission technologies. A further benefit is that the effect of climate uncertainties on the temperature calculation can be quantified.

The XDC Model was developed by right. based on science and is the ‘engine’ powering software products and services for companies, asset managers, banks, and others to conduct climate impact analysis, manage their Temperature Alignment / Paris Alignment, simplify sustainability reporting, set sound and science-based emission reduction targets, conduct forward-looking scenario analysis, guide climate-conscious investment and engagement decisions, and communicate with stakeholders. XDC Model is science-based, peer-reviewed, forward-looking, scenario-agnostic, and transparent temperature-alignment model and is available as an Open Source application.

2. The concept of XDC

XDC Model has a core logic which focuses on the decoupling of value creation from emissions. This is the same logic that underpins the European Green Deal as "a new growth strategy […] where economic growth is decoupled from resource use" [3] (see Figure 1). As companies are the primary economic source of emissions, the application of the XDC Model’s logic to companies describes the base version of the methodology, which is focused in this documentation. This core XDC Model is designed to analyze the Temperature Alignment of companies, focusing on Gross-Value Added (GVA) as the parameter for value creation.

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You can find the complete XDC Model documentation in the attached PDF file below.

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