To earn the flag, a company must provide SIX with a confirmation from an approved reviewer that it meets all flag requirements. Currently, two approved reviewers are available: S&P and SGS. The flag is valid for one year and must be renewed annually with an updated confirmation.
The requirements for the confirmation consist of three assessments. The first is a top-down analysis of whether the company's entire value chain aligns with the 1.5°C goal, by examining its future emissions reduction and removal targets. The second evaluates bottom-up whether it is credible that the company will continue to meet its targets. The third is an activity-level assessment that determines whether over 50% of the company’s current revenues and investments contribute towards the 1.5°C goal.
SIX has defined these criteria based on established sustainability principles and the scientific consensus on climate science according to the Intergovernmental Panel on Climate Change (IPCC). Herewith, the emerging accordance among widely used methodologies and standards are reflected. These mainly include the Carbon Disclosure Project Assessing Low-Carbon Transition initiative (CDP ACT initiative), the Climate Bonds Initiative (CBI), the UN Race to Zero Starting Line Criteria, and the WFE Green Equity Principles (2023). SIX continuously observes developments in this field and will refine its framework as necessary to ensure it remains current and effective.
Bjørn Sibbern, Global Head Exchanges and Executive Board Member, SIX, highlights: “Our new flag serves as a tool to enhance the visibility and reputation of companies. This in turn supports investors in making more informed decisions, reducing uncertainty around a company’s current and future climate emissions trajectory. We developed the concept for the flag following extensive exchange with listed companies, audit and legal firms, sustainability experts as well as industry associations and it represents a further step in our sustainability strategy.”