Most high-emitting industries not aligning with Paris Goals

Most high-emitting industries not aligning with Paris Goals

New research by the Transition Pathway Initiative finds that 29% of the largest publicly-listed industrial companies are set to align their emissions with the Paris Pledges by 2030, up from 24% in mid-2018.

These companies are aligned with the emission reduction pledges made by national governments in the Paris Agreement. However, those pledges are not anticipated to keep global warming below dangerous levels, and the report finds that fewer than one in five companies (19%) are aligned with a pathway to keep global warming at 2°C or below.

TPI assessed the Carbon Performance of 72 companies across 4 sub-sectors: paper, cement, steel and aluminium. It also assessed Management Quality on climate for 100 companies across five sectors, including chemicals. Taken together, these five sectors produce over 2/3 of direct industrial C02 emissions.

The research was carried out for TPI by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

Faith Ward, Co-Chair of the Transition Pathway Initiative and Chief Responsible Investment Officer at Brunel Pension Partnership, said:

“Industrial sectors like steel and cement face tough challenges to decouple emissions from production, but make no mistake, these industries must transform themselves if they are to survive the low carbon transition and play their part in achieving the goals of the Paris Agreement. Today’s TPI data shows it can be done – with 14 companies now aligned with a path to keep global warming below 2°C. Yet most industrial companies are significantly off-track on climate and that is an abdication of corporate risk management that must be urgently corrected.”

The report also found:

  • The proportion of companies disclosing their emissions has increased from 61% in 2018 to 76%. Much of this improvement comes from companies listed in Asia (especially China) and Russia.
  • More companies are setting long-term reduction targets. In 2018 only five industrial companies had set a 2030 target that was aligned with the Paris Pledges or better. Now 14 companies have done so.
  • Particular improvements are visible in the cement sector – where the number of companies aligned with the Paris Pledges or better has risen from two to five since 2018; and in paper, where 10 of 18 companies are now aligned with the pledges or better.
  • The steel sector has shown a significant improvement in climate management quality. Its average management quality score has risen from 1.8 in mid-2017, to 2.4 this year. However, it has not improved its Carbon Performance, with only six out of 24 companies still aligned with the Paris Pledges.
  • At 3.0, the chemical sector has the highest average management quality score of all sectors assessed by TPI. Yet the largest chemicals company by market capitalisation, DowDuPont, is only on Level 1.

Original source: UNFCCC
Published on 03 February 2020