Lessons from top firms could transform Europe’s emissions if they were shared and copied, new report claims
Europe’s most carbon-intensive companies could help slash the continent’s corporate emissions in half by simply emulating the best climate performers in key industry, a new report has suggested.
Published by climate disclosure NGO CDP and management consultancy Oliver Wyman today, Now For Nature: The Decade of Delivery details how mainstream businesses are not decarbonising nearly fast enough to deliver on global climate goals. But at the same time the report also shows how the best in class businesses that have delivered the steepest emissions reductions could provide a successful template for others to follow.
Drawing on recent data from CDP – which calls on listed firms to publicly disclose environmental data requested by investors – the report shows how the number of companies with approved science-based targets grew 85 per cent last year to now cover businesses responsible for a third of reported emissions.
But despite growing corporate engagement with climate risks, just 16 per cent of firms have targets aligned with the Paris Agreement’s 1.5C goal, the report notes. The COVID-19 pandemic triggered a 13 per cent drop in reported corporate emissions, but the report warns there is little evidence these emissions reductions will be sustained post-pandemic. “After adjusting for COVID-19, cuts are in the range of the pre-pandemic trend of 1.5 per cent per year – far short of the 4.2 per cent required for companies to align with the Paris agreement’s 1.5C pathway,” it states.
The report comes just a day after the latest update from the International Energy Agency (IEA) similarly confirmed global energy-related carbon dioxide emissions rose by six per cent in 2021 to 36.3 billion tonnes, reaching their highest ever level on the back of a recovering global economy and increased coal power use.
Maxfield Weiss, executive director at CDP Europe, said the gap between those companies delivering the steepest emissions reductions and their peer group was widening. “I’m encouraged by leaders in Europe’s financial system and real economy stepping up,” he said. “But leadership is really concentrated [and] we must broaden action out across the whole market. It’s high time all companies and financial institutions with huge, global environmental footprints take urgent action to align their value chains with our planet’s natural boundaries. We need to see a true transformation to reach both net-zero emissions and a full recovery of nature.”
Rob Bailey, a partner at Oliver Wyman, said that while there had been “a huge acceleration in climate ambition” with more companies setting science-based targets, real world progress on reducing emissions was more mixed. “The data is clouded by the impact of COVID restrictions, but after adjusting for this, it is hard to see evidence of the step-change in emissions reductions needed,” he said. “There is going to be a laser focus on delivery now.”