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Sensemaker: Footsie falls short

Sensemaker: Footsie falls short

What just happened

Long stories short

  • Dominic Raab, the deputy PM, requested an inquiry into his own conduct after bullying complaints.
  • Nato said a missile that crashed in Poland was probably a stray fired by Ukraine’s air defences.
  • Myanmar released almost 6,000 prisoners including former British diplomat Vicky Bowman. 

Footsie falls short

Britain’s biggest listed companies aren’t doing enough to combat climate change. Not even close. Newly updated Tortoise data shows that FTSE 100 companies overall

  • aren’t cutting their emissions fast enough;
  • are on a pathway which if followed by the rest of the world would lead to a catastrophic 2.8 degrees celsius of warming; 
  • are on average emitting more from their own operations year-on-year.

In human terms: current FTSE 100 emissions reductions targets are inadequate to maintain a habitable planet for millions of people. 

Total CO2 emissions by these companies are down slightly this year compared with last, but that is chiefly because of the exit of three mining companies rather than an improvement in performance, according to an analysis of the Responsibility100 Index, published today.

Most FTSE 100 companies have net zero plans but their medium-term targets are not deep or rigorous enough to help keep the world on a temperature pathway of 1.5C above pre-industrial levels, the aim agreed under the Paris accord with the goal of avoiding the worst impacts of climate change. 

The Responsibility100 Index, which was launched in 2019, compares companies’ commitments to their performance across measures including climate, equality and employees’ well-being. Unilever is in top place in the Index, followed by AstraZeneca and NatWest. Airtel Africa comes lowest on the ranking.

Other key findings from the newly updated Index analysis include:

  • FTSE 100 chief executives’ pay soared by an average of 31 per cent last year.
  • But 16 companies, including big employers like Tesco, Sainsbury’s, Compass Group and Associated British Foods (owner of Primark), have a majority of employees who earn less than ÂŁ25,200, considered the minimum acceptable standard of living. 
  • 47 FTSE 100 companies have no female senior executives.
  • Employee satisfaction fell for more than three quarters of reporting companies.

Last year the top ranking in the index was held by Severn Trent Water. This year the company falls to 12th place, largely because of fines related to sewage incidents included in ranking calculations for the first time.

Just 47 of the companies in the index have set science-based emissions targets endorsed by the Science-Based Targets initiative (SBTi), a scheme regarded as the gold standard for corporate carbon reduction.

The SBTi, which works with thousands of businesses, requires companies to set targets based on reducing emissions either in their own operations or their supply chain.

Offsets are only accepted for additional reductions beyond a company’s net zero target and the initiative does not count avoided emissions – reductions which come from the use of a company’s products, such as fuel-efficient tyres.

Shell, BP, Glencore, Rio Tinto and Anglo American are among major emitters on the London index whose emissions are not covered by the targets.

As of this year the SBTi is not validating commitments from fossil fuel companies. But even when it was, the big emitters on the FTSE were either choosing not to make them or setting their sights low.

Shell, Glencore, Anglo American and Rio Tinto all said they were aligned or broadly aligned with the Paris goals – although spokespeople for several companies noted there is currently no standard methodology to determine whether companies’ targets align with the goals.

A temperature rise above 2C brings with it living conditions that will be hard to tolerate for millions of people, including longer heatwaves and more severe droughts.

To see the full rankings and analysis, visit The Responsibility100 Index site.


CAPITAL ECONOMY, BUSINESS AND FINANCE

Weisselberg talks

On the day Donald Trump announced his candidacy for the 2024 presidential election, his right-hand man at the Trump Organization was in a Manhattan court testifying against the company in a tax fraud case. Allen Weisselberg told the court that Trump had personally authorised the corporate benefits awarded to top executives in a scheme that helped the business avoid tax. In lieu of paying Weisselberg a larger salary (and more tax to the IRS), the Trump Organization covered his rent on a 1,200 sq ft apartment overlooking the Hudson river – with a company car, garage rental and utilities thrown in. Weisselberg owes taxes on nearly $2 million of expenses and faced up to 15 years in prison, but prosecutors offered him a plea deal in return for his cooperation. It’s a big flip: Weisselberg has been part of the Trump family’s inner circle for more than 40 years. He is still on the Trump Organization payroll, earning $640,000 a year. 


TECHNOLOGY AI, SCIENCE AND NEW THINGS

Crypto breaks

Crypto was changing the world and redefining global finance – until it wasn’t. First, FTX crashed. It is bankrupt and under federal investigation, while founder Sam Bankman-Fried is being sued. But FTX was just the first domino. In recent days, one of the world’s biggest crypto miners, Core Scientific Inc, said it may be seeking bankruptcy protection; Genesis Trading, a large decentralised lending and trading platform, halted trades; cryptocurrency lender BlockFi reportedly prepared for a potential bankruptcy filing; Tether briefly unpegged from the dollar (which is a problem because it’s whole job is being pegged to the dollar) and the price of Bitcoin is down nearly 20 per cent this month. Meanwhile, US quarterback and crypto bro Tom Brady faces legal action for promoting FTX and thousands of Mercedes G-Wagons – the unofficial crypto bro car of choice – are for sale on Autotrader. 


Our planet CLIMATE AND geopolitics

Big and beautiful

Offer marine life a safe haven and it won’t just get more plentiful: species will get bigger too. That’s the finding of Tonje Sordalen of the University of Agder in Norway, in research published this week in the Proceedings of the Royal Society. Sordalen noted that fishing tends to be size-selective, while in species such as lobsters, the individuals that grow the biggest also tend to be bolder, making them more likely to end up exploring lobster pots. This creates a skew towards the small, which, she theorised, should be countered in marine protected areas. The theory was borne out in research conducted with the Norwegian Institute of Marine Research on lobster populations, which found that females in particular grew larger and faster in protected areas. Good for lobsters, good for marine management and good for fishing boats in nearby unprotected waters, which can pick up bigger and better overspill from the reserves. 


The 100-year life health, education AND GOVERNMENT

Childcare sick days

Last month, more than 100,000 Americans missed work because of childcare issues – more than during the peak of the pandemic (93,000 in October 2020 and 88,000 in April 2021). That’s not to say Covid isn’t playing its part, but as the world came roaring back so did the viruses kept at bay while people masked up and stayed home. Flu, the common cold and RSV – a respiratory virus that particularly affects very young children – are all doing the rounds. Top that with staffing shortages in schools and day-care after an exodus of workers for better pay in other sectors and parents are left stranded. Strained hospitals are also struggling with the earlier than usual cycle of flu and RSV while bracing for a potential Covid resurgence over winter. Why it matters: federal data already showed worker productivity shot downwards in the first six months of the year. 


CULTURE soCIETY, IDENTITY AND BELONGING

Scraping back control

As expected, Republicans have been declared winners of the lower House of Congress. Less expected, their margin will be razor thin when all the votes are counted, and California’s Kevin McCarthy will have to fight rather than swagger his way to the speakership in January. Despite the narrowness of their win the new majority will aim to shut down the congressional investigation of the January 6th insurrection; launch one of their own into the business dealings of Hunter Biden, the president’s son, and insist on federal spending cuts in return for raising the debt ceiling. The big geopolitical question is whether McCarthy supports Ukraine enough to keep approving big military aid packages. He’s said there will be no blank cheque on his watch. Fair enough. There have been none from London, Paris or Berlin. But they all need to remember the alternative: dictatorship grinds out a win.

Thanks for reading. Please share this round, send us ideas and tell us what you think. Email sensemaker@tortoisemedia.com.

Maddy Diment
Lead Researcher

Jeevan Vasagar
@jeevanvasagar

Additional reporting by Jessica Winch, Phoebe Davis, Giles Whittell, Sebastian Hervas-Jones and Ella Hill.

Photographs Getty Images


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