Listed companies in the UK will be required by law to publish details of their GHG emissions from tomorrow
All companies listed on the on the London stock exchange will be obligated from the 1st of October to report their GHG emissions, under the UK Climate Change Act. This act commits the UK to reducing emissions by at least 80% in 2050 from 1990 levels. The UK is the first country to set this as a legal requirement.
The Government has taken a number of steps to limit the UK’s emissions of greenhouse gases, however, some reports which have been published show companies still don’t take climate change seriously. CDP, an international organization which works with market forces to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them, has just released an analysis which reveal lack of action on emissions by top FTSE Global 500 corporations.
Even during a period of global recession, total direct emissions from the 500 largest listed companies in the world have not changed significantly in the past five years. In fact, the report concludes: “The biggest emitters, who have the largest impact on global emissions and so present the greatest opportunity for large-scale change, need to do more to reduce their emissions. There is a disparity between companies’ strategies, targets and the emissions reductions which are required to limit global warming to 2C. This means that major corporations are doing too little to support the fight against climate change.
The analysis, based on the climate and energy data from 389 companies listed on the FTSE Global 500 Equity Index, also shows little progress in measuring, managing and reducing greenhouse gas emissions in supply chains, known as scope 3. In addition, the report shows that companies are seeking to take the simplest route by measuring the easiest to reach aspects of their supply chains, even when they know they are having a negligible impact. For example, nearly three quarters of the Global 500 companies measure emissions associated with business travel but this equates to just 0.2% of their overall reported scope 3 emissions.
So, the CDP report states: “This suggests that current scope 3 reporting does not reflect the full impact of companies’ activities, and may mislead as to the full carbon impact of a company.”
Perhaps of most interest in the report is the finding that companies still find it easier to quantify risks rather than opportunities. The report says that more than half of the respondents quantified at least one risk while only 41% were able to quantify at least one opportunity. It concludes: “Companies tend to focus on tangible risks in areas such as carbon taxes or energy prices, whereas the benefits from climate-related opportunities are often less tangible, such as changing consumer behavior”.
While 97 companies, such as Apple, Facebook and Amazon.com refused to take part in the survey, the report highlights those companies that lead the 500 corporations in terms of disclosure and driving performance improvements. The top 10 were BMW, Daimler, Philips Electronics, Nestle, BNY Mellon, Cisco Systems, Gas Natural SDG, Honda, Nissan, and Volkswagen.