The Green Transition Index (GTI) benchmarks 29 countries across Europe (See Chart 1) on progress made in the transition towards environmental sustainability in the categories of overall Economy, Nature, Manufacturing, Utilities, Waste, Buildings, and Transport. (See Chart 2) Within these seven categories, the performance of each country is measured based on a total of 28 key performance indicators (KPIs) shown in Chart 2.
Chart 2: Overview of The Green Transition Index’s seven categories
Source: Oliver Wyman analysis
The categories were chosen based on the main sources of emissions in the European economy, with Manufacturing, electricity and gas (Utilities), Transport, and the heating and cooling of Buildings cumulatively accounting for 61% of total GHG emissions in the 27 countries in the European Union (EU-27) in 2020. The other two countries included in our index are the United Kingdom and Norway.
The categories of Nature and Waste were included to assess the countries’ environmental practices on the use and protection of natural resources as well as their generation and treatment of waste. Finally, Economy is an overarching category that not only looks at overall country-level performance in such measures as emissions and energy consumption, but also assesses government action to drive the green transition through publicly funded research and development (R&D) and other policies.
To allow for cross-country comparisons, KPIs often refer to “intensities,” meaning emissions, waste, or energy consumption in relation to a “normalizing” denominator such as gross domestic product (GDP), value added by sectors, or population. In the index, GDP is always nominal GDP.
In the Utilities category, the focus is on the progress countries make in “transition technologies” that either have a direct impact on emissions reduction, such as renewable energy, green hydrogen, or carbon capture and storage (CCS) or is an essential component of a clean energy system of the future. This might include the quantity of battery storage available.
For each KPI, the countries’ performance is indexed, with the best-performing country receiving a score of 100 and the worst-performing country getting zero. Values in between are scored in a linear manner. These KPI scores are then aggregated at category level. All seven category scores are again aggregated, evenly weighted, to reach an overall GTI score.
