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The C100 Special

The C100 Special

Findings from Tortoise’s Responsibility 100 Index show that the UK’s biggest supermarket chains are failing basic transparency tests when reporting on their environmental impact.

Number of the day: 100,000,000,000 – amount finally pledged by industrialised nations on Monday in annual climate finance for developing countries, in US dollars.

Publish and be ranked. Despite growing pressure from government and consumers, the UK’s biggest supermarket chains are failing basic transparency tests when reporting – or not reporting – on their environmental impact.

Tesco, Sainsbury’s, Morrisons and Ocado all neglected to give concrete numbers in their latest annual and sustainability reports on how much waste they recycle or how much of the energy they use is from renewable sources. 

For the crucial Scope 3 measure of overall greenhouse gas emissions, Tesco gave a bizarrely low figure of under 500,000 tonnes of CO2 equivalent in its 2021 annual report, then revealed how much it had not been reporting by raising that figure to 89 million tonnes, one month before Cop. This figure includes emissions from its supply chain.

Tesco reported a 50 per cent cut in Scope 1 and 2 emissions, which cover those from its own operations and from the heat and power used to run them. It also claims to have sourced all its power from renewables in 2020-21. 

A failure to collect and / or report vital information is the main cause of falling rankings in the latest Tortoise Climate100 (C100) index of FTSE 100 companies’ climate performance, published today. Better reporting is the main reason for higher rankings. 

The index shows that

  • the total carbon footprint of the FTSE 100 shrank by 9 per cent last year but is still 6 per cent (or 19 megatonnes CO2 equivalent) bigger than the UK’s, at 345 mt CO2e;
  • that number excludes nearly ten times as many emissions for which the FTSE 100’s members are indirectly responsible, totalling 3.24 gigatonnes CO2e;
  • Morrisons performed worst of all the retailers, entering the Tortoise index at 92nd out of 100, with a “C” rating from the Carbon Disclosure Project, no Scope 3 emissions reporting at all and only one passing mention of renewable energy in a 39-page sustainability report.

Tesco fell 28 places on the C100 to 48th, mainly because of its failures to report on waste and renewables. Burberry stopped reporting on its recycled waste and fell from first to 14th place. Persimmon, the house-builder that paid its former CEO a £75 million bonus in 2018, fell from 35th to 52nd after reporting no Scope 3 emissions – even though the carbon-intensive cement and construction industries have been under heightened scrutiny in the run-up to Cop.

The index rewards transparency. One of the biggest climbers was SSE, the energy supplier, for improved reporting on waste to landfill, recycling and use of renewables and water. SSE halved its Scope 3 emissions by selling off its retail energy business to OVO Energy, but absolute Scope 3 numbers are not factored into the C100 because there is no consensus yet on how to calculate them. 

That could change – UK companies face mandatory reporting by 2025 under rules set out by the Taskforce on Climate-related Financial Disclosures (TCFD). If and when that happens, the C100 will reflect it. In the meantime…

More good:

  • Every FTSE company required to do so reported its Scope 1 and 2 emissions.
  • The number voluntarily reporting Scope 3 emissions rose to 72 from 62 in the first year of the C100.
  • On average, companies reduced their emissions intensity by 14 per cent – a metric less likely than some to have been skewed by the pandemic because it measures emissions per unit of output. 

More bad:

  • Only 54 of 100 FTSE companies reported having science-based environmental targets (SBTs).
  • Only 29 committed themselves to pathways aligned with less than 1.5 degrees of warming compared with pre-industrial levels.
  • Only 62 published the share of their energy usage drawn from renewable sources and of them only 20 used 90 per cent or more renewable energy. Only 59 said how much of their waste was recycled.

In climate reporting, as in political scandal, it’s the cover-up that costs. “We make no apology for prioritising simple, clear, proactive reporting of key data as a criterion for ranking companies in the C100,” says Alexandra Mousavizadeh, head of Tortoise Intelligence. “If companies can’t even measure the problem they can hardly say they’re solving it.”
For the full C100 index and its methodology, please click here and head to “Explore Our Data”.


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Engagement and activism

Better than blah?
If telephoning recalcitrant world leaders and begging them to announce new cuts in carbon emissions counts as activism, Boris Johnson is going to have to step forward as a climate activist. He may not like it, but hosting Cop confers responsibilities and he’s married to an avowed conservationist in Carrie Johnson, née Symonds. In any case, since the start of October he’s phoned the leaders of Russia, India, Japan, Indonesia, Fiji, Egypt and South Africa among other countries to urge them to raise their climate games in time for Glasgow. He’s also called himself the Moses of climate change. Domestic critics see him frantically managing down expectations of a conference that looks highly unlikely to keep the planet on a course to 1.5 degrees of warming. The view from down under is slightly different – of a man wrangling guests who, as the Queen has noted, won’t even say if they plan to show up. Australia’s prime minister, Scott Morrison, is one of those who will, and has made a last-minute deal with the National party to make a binding target of net zero by 2050. Morrison has already been cast as the principal villain of Cop. Johnson called the deal “heroic”. 


policy

Selfishly green
Morrison apart, the strongmen won’t be attending Cop26. Does it matter? Despite no-shows from Xi Jinping, Vladimir Putin and Mohammad bin Salman, all three leaders have made promises to get their nations to net zero by 2060. But before we start suggesting pigs might fly, it’s worth examining why they might want to act: Saudi Arabia’s announcement is tacit acknowledgment of the growing threats posed by volatile oil prices, cheapening renewables, and unendurable temperatures. Russia’s pledge is an attempt to build rapport before its negotiators turn up at Cop lauding the benefits of natural gas and Siberian carbon sinks. In China, worsening floods and water scarcity have upped the ante, while public concern about pollution has been high for decades. There’s even a case to be made that a green streak runs right to the top: Xi Jinping was extolling the virtues of “green GDP” and “ecological civilisation” as early as 2004. In reality, the barriers to further climate action from China have most to do with domestic politics. Energy security, a coal-intensive system and protecting jobs in China’s rust belt are the top concerns. Right now, they’re trumping further ambition – but for how much longer? As Sam Geall, CEO of China Dialogue writes, China’s pledge “is no altruistic gesture; neither is it even indicative of a cooperative stance internationally. Climate action is in China’s national self-interest.”


eco-nomics

Double the windfall
The Crown Estate has been accused of being “a bit greedy” after it leased the same area of UK seabed to two companies offering different solutions for achieving net zero. After auctioning the rights to build a wind farm off the Yorkshire coast in 2010, the Queen’s property manager also agreed a deal with a BP-led project for storing carbon under the seabed, which has since been fast-tracked as part of the government’s net zero strategy. It’s unclear whether the projects will be able to co-exist. If they can, it’ll be a further boon for the Crown Estate, already set to make £879m a year over the next decade from leases auctioned to six new offshore wind farms. A good moment to revisit Tortoise’s investigation into royal revenues – including those deriving from green energy.


Science and tech

Bundle up
Asia’s energy crisis is about to be compounded by a harsh winter. The La Nina weather pattern, which occurs when equatorial trade winds bring cold water up from the bottom of the sea, is forecast to emerge in the Pacific. Experts also point out that a weaker polar vortex – the swirl of winds that keeps temperatures low over the Arctic – could allow more icy air to seep south. In anticipation of an earlier-than-usual winter heating season in parts of Asia, Japan’s liquified natural gas stockpiles have climbed to their highest in five years. Meanwhile, China has been hiking coal imports and pushing coal miners to ramp up output to conserve domestic supply. If the country’s current coal output is sustained, it could produce just under 4 billion tonnes by year-end. That would be a record.

Do share this around, and let us know what you think of it.

Thanks for reading.

Giles Whittell
@GWhittell

Barney Macintyre

@Barneymac

Data and additional reporting provided by Tortoise Intelligence.

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