Heavy-emitting firms lagging behind Paris Agreement targets

Emission reduction targets aligned to the Paris Agreement’s 2C global warming limit are set to be missed by the vast majority of the highest-emitting listed companies, according to the Transition Pathway Initiative’s (TPI) annual report.

The report assessed 238 energy, industrial and transport companies on projected emissions intensity and found that just 18% (43 companies) are on track to deliver emission reductions that are aligned to climate science, with the oil and gas industries lagging behind other sectors. Electric utilities and paper companies, for example, are on the right trajectory.

TPI’s co-chair and chief responsible investment officer at Brunel Pension Partnership Faith Ward said: “The IEA has warned that, while carbon emissions will likely decline this year, in the medium term the coronavirus outbreak could slow down the low carbon transition, as green investments are put on hold by cash-strapped governments and businesses.

“It is therefore of deep concern that so few companies were on the right path before the virus struck. Investors must now use their influence to ensure that climate commitments are ramped up, not discarded in the face of short-term financial pressures.”

The report found that heavy emitting companies in sectors like aluminium, steel and shipping are failing to disclose, or simply don’t have, emissions reduction data aligned to the Paris Agreement.

Professor Simon Dietz, research lead for TPI and Professor of Environmental Policy at the LSE’s Grantham Research Institute on Climate Change and the Environment, said: “Our analysis shows that not only have relatively few companies set emissions targets aligned with the Paris Agreement goals, not all of the companies that have done so are actually on track to meet those targets.

“Particularly in the cement, oil and gas and steel sectors, few companies are reducing their emissions fast enough to deliver their targets. In some cases, companies with targets actually saw their emissions intensity go up in recent years. This shows that investors must not only look at what targets companies have set but also at what those companies are doing on the ground and in the boardroom to deliver them.”

Source: edie.net