Tortoise has taken the FTSE’s emissions targets and converted them into a temperature projection. What does it reveal?
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Just 44 of the UK’s 100 biggest listed companies have set emissions targets that are aligned with the Paris Agreement goal of limiting global warming to well below 2C, according to new analysis from Tortoise.
The Tortoise research takes companies’ emissions targets and converts them into a temperature projection.
So what? This is the first time individual temperature projections for the 100 biggest UK listed companies have been published. It shows that relatively few companies on the London exchange are prepared for a future of rapid decarbonisation.
The FTSE has been flattered over the past year by soaring energy prices and the downturn in the technology sector, but its exposure to carbon-intensive businesses suggests long-term weakness.
The analysis found:
- Autotrader, Next, SSE, Tesco and Whitbread are among just 16 FTSE 100 companies that have set targets aligned with a 1.5C rise in global temperatures and are also on track to meet that target.
- A total of 29 companies in the FTSE 100 are aligned with a temperature rise of more than 3C, including Shell, Rio Tinto and BAE Systems.
Tortoise reported last year that if everyone decarbonised at the same rate that the FTSE 100 collectively plans to, the world would be on track for warming of at least 2.8C. The full list of companies and temperature pathways is published here.
Separate analysis from the Science Based Targets initiative show that both Germany’s DAX 30 and France’s CAC 40 have lower temperature pathways than the FTSE 100. The London index is heavily exposed to oil, gas and mining companies.
However, no advanced economy index is aligned with the Paris goal of limiting warming to well below 2C and preferably to 1.5C above pre-industrial levels.
The UN said last year that there was “no credible pathway” to holding the global temperature rise to 1.5C. Above this level, millions more people around the world will be exposed to extreme heat waves, rainfall and drought, while the risk of forest fires and the spread of invasive species and pests increases.
Off track Overall, less than half of FTSE 100 companies are on track to meet their emissions reductions targets, wherever those targets are set.
Companies are coming under growing pressure from investors, consumers and regulators to prepare for the transition to net zero. But while some of the UK’s biggest companies have grasped the need for change, far too many are still focused on business as usual.
