(Photo Credit: Nik Shuliahin, Unsplash)A new assessment of 238 energy, industrial, and transport companies on their project emissions intensity found that more than 80% of the highest-emitting ones have made little corporate climate progress.
The annual “State of Transition” report was published today by the Transition Pathway Initiative (TPI), a global effort led by asset owners and backed by more than 60 investors with over $18 trillion of combined assets. TPI says that the investment community uses this report as a gauge on whether the global economy is on track to fulfill the goals of the Paris Agreement.
“For companies that have set emissions targets to 2025 or beyond, the study compared those targets with current rates of emissions intensity reduction to establish whether they are on track,” according to TPI.
Companies in sectors such as oil and gas and airlines lag behind significantly on carbon performance, the report found.
“Oil and gas companies with 2025 targets are not currently reducing emissions intensity fast enough to meet their targets,” TPI noted. “For steel and cement companies with 2025 targets, current emissions intensity is actually rising, casting serious doubt over whether their targets can be met.”
On the flip side, the transition to fulfill the goals of the Paris Agreement is well under way in sectors that include shipping, paper, and electric utilities, according to the report.
“Electric utilities and paper companies with 2025 targets are reducing their emissions intensity by approximately 4% per year,” TPI concluded. “Continuing on the same pathway would more than deliver companies’ 2025 targets.”
The overall lack of corporate climate progress by the majority of listed companies has investors worried. Faith Ward, co-chair of TPI and chief responsible investment officer at the Brunel Pension Partnership in the UK, explained what’s at stake.
“The International Energy Agency has warned that, while carbon emissions will likely decline this year, in the medium term the coronavirus outbreak could slow down the low-carbon transition as green investments are put on hold by cash-strapped governments and businesses,” she said. “It is therefore of deep concern that so few companies were on the right path before the virus struck.”
