Responsibility100 Temperature Ratings
Assessing the climate pathways of Responsibility100 companies against the Paris Agreement aim of 1.5C.
Updated 7 February 2023.
Click through the buttons below to navigate to the ratings, our findings, and the methodology.
We set out to analyse FTSE 100 companies’ emissions reduction targets. These fall into two camps: Scope 1&2 (emissions from a company’s operations), and Scope 3 (emissions resulting from their suppliers and consumers). This is the Scope 1&2 emissions reduction target for Unilever, a consumer goods company.
Emissions reductions can be linked to different climate heating scenarios, ranging from below 1.5C up to 3.2C. Temperature ratings map the ambition of companies’ targets to these pathways – Unilever’s Scope 1&2 target is aligned with global heating of 1.5C.
However, Unilever’s Scope 3 target is less ambitious, aligning more closely to 1.9C. This is still below the 2C upper limit agreed during the Paris Agreement.
Most of Unilever’s emissions lie in its Scope 3 footprint – about 99%, so the total temperature rating for the company is closer to the Scope 3 pathway.
Unilever’s temperature pathway can be plotted on a line stretching from a best-case scenario of 1.5C, up to a business-as-usual scenario of 3.2C.
Using data from Tortoise’s Responsibility100 Index, Tortoise calculated pathways for all 100 FTSE companies – while some are aligned with the Paris Agreement, the majority have not set sufficiently ambitious targets.
The weighted average (which accounts for the size of each company’s footprint) is concerning. On average the FTSE 100 is aligned with 2.8C, far above the 2C limit agreed at Paris.
Another aspect of the analysis reveals how fast companies have managed to cut emissions since they declared a reduction target – are they on track to meet their targets? Consider a company which has cut emissions by 15% since 2018, and has a target of 50% reduction by 2030.
The average reduction can be extrapolated to predict whether a company is likely to achieve its target. In this case, the company would miss the target and be marked as Off-Track.
If the company had cut emissions more aggressively though, we would expect them to meet their target, and mark them as On-Track.
The findings
Temperature ratings are a system for assessing the ambition of a company’s targets, producing a score from 1.5C to 3.2C which represents the level of global heating to which a company is aligned.
On average, FTSE 100 companies are on track for 2.8C of heating, well above the 1.5C aim set out in the Paris Climate Agreement. Read more about our findings in the Net Zero Sensemaker.
Methodology
Temperature ratings, developed by CDP and WWF, are a framework for assessing companies’ emissions targets. To arrive at a score, the average reduction in emissions required to meet a company’s medium term (2020-2035) targets is calculated for Scope 1&2, and Scope 3 separately. These reductions are then combined as a weighted average to produce a final temperature rating.
To assess whether or not companies are on-track to meet emissions reduction targets, we extrapolated their average reduction since their baseline year to see if it puts them on track to meet their target. For this analysis we only considered Scope 1&2 emissions, since changes in Scope 3 emissions are often linked to improved reporting rather than true changes in emissions.
Authors
Research by Alex Inch and Sophie Barnett
To get in touch with the team, please email: responsibility100@tortoisemedia.com.
