Only 25% of firms on target for climate goal

A report by Arabesque has found that only 25% of the world’s biggest companies are on course to limit the global temperature rise to 1.5 degrees by 2050.

Arabesque assessed fourteen of the world’s largest stock indexes between 2015 and 2019 using its Temperatureä Score technology, including the FTSE 100, S&P 100, DAX and Nikkei. It found that just 25% of companies listed on all the indexes are aligned with meeting the 1.5 degree goal.

European companies in the Stockholm 30 (50%), DAX 30 (39.29%), Helsinki 25 (33.33%) and SMI 20 (33.33%) are the best performers. However, fewer than one in four companies in the FTSE 100 (23.08%) and S&P 100 (23.08%) are on course to meet the target, whilst only 8.51% of companies in the Hang Seng Index 55 and just 4.55% of those in Australia’s ASX 50 are aligned with the 1.5 degree goal. In Japan, 26.67% of companies in the Nikkei 225 are on course.

Arabesque’s data also shows that 15% of companies listed across the fourteen indexes are not publicly disclosing their greenhouse gas emissions, equating to approximately USD 5 trillion in market capitalisation. The Hang Seng Index has the highest number of non-disclosures, with 29% in 2019, compared to the FTSE 100 with the lowest at 2%.

Dr. Rebecca Thomas, who led Arabesque’s research, said: “Over recent years, the quantity of corporate emissions data has increased significantly. Previous research from the Temperature Score shows that from 2014 to 2019, the proportion of companies disclosing at least scope 1 and scope 2 emissions rose by almost 25%. However, it is clear from our latest analysis that this has yet to translate into corporate climate action at scale. While overall progress is encouraging, a lot more needs to be done to keep the 1.5-degree goal within reach.”