FTSE-100 companies are falling far short of reducing their emissions to meet
target reductions set out in the Climate Change Act, according to figures
released from the Climate Disclosure Project (CDP).
Just 24 FTSE-100 companies across the energy, utilities and materials sector
are responsible for 87% of all reported emissions from index constituents. The
combined average reduction rate between all constituents is just 1.2% per year
but the government needs to double that to around 2.4% if it is to have any
chance of achieving its 20% target by 2020.
The CDP produced its FTSE-100 Carbon Chasm report in February and set out to
evaluate how FTSE-100 companies are working to reduce their emissions. It then
compared that information against the UK target of bringing carbon emissions
down 20% below 1990 levels.
The targets set by the most carbon-intensive sectors, responsible for the
majority of FTSE-100 emissions, are not sufficiently ambitious and will not
deliver reductions required by the UK Climate Change Act, the report claims.
The CDP has highlighted the need for the government to work with other
countries to produce results at home given the international nature of FTSE-100
companies and the sources of their emissions.
“It is crucial that those sectors responsible for nearly 90% of FTSE-100
reported emissions set aggressive reduction targets,” says Paul Dickinson, chief
executive of CDP.
“Though we see some individual companies setting strong targets, the sector
average reduction targets for the materials, energy and utilities sectors are
lagging behind what is required to meet UK government targets. Regulation is
sending strong signals to companies of the necessity to manage carbon, but as
many of these companies operate globally we also need a strong global framework
to create the right incentives to set sufficiently strong targets.”
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