On the go: Only one in eight of the world’s largest-emitting companies are reducing carbon emissions at the rate required to keep global warming below 2C, a major new report has found.
The report, which assessed the climate performance of 274 of the world’s highest-emitting publicly listed companies, revealed that almost half (46 per cent) do not adequately consider climate risk in operational decision-making.
A further 25 per cent do not report their own emissions at all, despite the recommendation of the Task Force on Climate-related Financial Disclosures.
Among the companies assessed for the second consecutive year, only 35 of 130 companies improved how they integrate climate change into their business decisions.
The study was carried out for the Transition Pathway Initiative by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.
It used FTSE Russell data to analyse leading companies in 14 carbon-intensive sectors such as oil and gas, electric utilities, automobiles, airlines and steel. These sectors account for 41 per cent of global emissions from publicly listed companies worldwide.
TPI is backed by investors with $14tn (£11.2tn) of assets including pension funds such as California Public Employees’ Retirement System and Environment Agency Pension Fund, and asset managers such as Legal & General Investment Management, BNP Paribas, Aberdeen Standard and Robeco.
Commenting on the report, Adam Matthews, co-chair of TPI and director of ethics and engagement at Church of England Pensions Board, said: “The clock is ticking on irreversible climate change. The fact that only one in eight of the highest-emitting firms are responding at anywhere near the pace required is an urgent challenge to investors.
“Investors themselves need to adopt an emergency footing otherwise the window to secure the change we need will be gone.”
Faith Ward, co-chair of the TPI on behalf of the Environment Agency Pension Fund, part of the Brunel Pension Partnership, added: “Today’s research shows clear leaders and laggards emerging within sectors, from airlines to aluminium, and that gives investors an investment-relevant decision to make today.
“As the effects of climate change accelerate, we can expect to see more capital flow away from those companies that bury their head in the sand, and towards those companies aligning with a 2C pathway.”
