Few FTSE 100 firms have plans for net zero

Fewer than 25% of FTSE 100 companies have published plans to reach net zero carbon emissions which are scientifically backed according to Arabesque.

The report say 23 companies in the FTSE 100 have set net zero targets meeting the standards of the Science Based Targets Initiative (SBTi), and 45 companies have set no target at all.

The SBTi reviews companies’ net zero plans to verify if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement, limiting global warming to well-below 2°C above pre-industrial levels, and pursuing efforts to limit warming to 1.5°C by 2050.

The analysis also finds 28 FTSE firms are on course to contribute to a global temperature rise of 2.7°C or above by 2050. This compares to 20 FTSE 100 companies who are on track to reducing temperature rises to 1.5°C by 2050, in line with the Paris Agreement.

Britain’s top firms are performing worse by this measure than almost every other comparable economy, with more companies on track to limit rises to 1.5°C by 2050 in the US’s S&P 100 (27%), Japan’s Nikkei 225 (27%), Germany’s DAX 30 (39%), France’s CAC 40 (36%), Italy’s FTSE MIB 40 (39%) and Sweden’s Stockholm 30 (42%)

The best performing companies include Rolls Royce, British American Tobacco and Unilever and the worst include Vodaphone, Morrison’s and Shell.

Daniel Klier, president of Arabesque, said: “These findings show a wide gulf between where the FTSE 100 stands today, and where it needs to be to deliver on the UK’s net zero target.

“Most of the UK’s biggest firms are not on a path to reach net zero by 2050 and we will need to see a significant change in business models and capital allocation. This is getting increasingly challenging given how little time we have left, with the IPCC warning emissions must be slashed by 50% by 2030.

“The world’s top 100 firms are responsible for 70% of the world’s climate emissions. So the performance of our biggest businesses will be one of our greatest challenges to achieving net zero, but also, where one of our biggest opportunities to reduce emissions will lie. The time for commitments is now passing, however, and 2022 must be a year of action.”

Georg Kell, founder of the UN Global Compact and Arabesque’s chairman, added: “When we set up the UN Global Compact, the rationale was simple: public goods, like the environment, need the private sector too. The fact that a quarter of FTSE 100 firms are leading the way on this, in the absence of clear regulation and direction, shows progress has been made.

“But we still have a long way to go, and more action will be needed, including mandatory corporate disclosure on climate emissions, and more robust and scientifically based commitments to steer the economy in a green direction.”