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The 2008 UK Climate Change Act, sets some of the world’s most aggressive national targets by introducing the first ever long-term, legally binding, national framework to tackle dangerous climate change. The Act sets a UK target of 80% reduction in greenhouse gas (GHG) emissions from 1990 levels, by the year 2050. A new report, produced by the Carbon Disclosure Project (CDP), evaluates how UK FTSE 100 companies’ emission reduction targets measure up against the national target and uses the CDP 2009 dataset to analyse how ambitious company carbon reduction targets actually are.
Key Findings:
- The average annual greenhouse gas emissions reduction rate for FTSE 100 company targets is 2.5%. A 2.4% annual reduction rate is required to meet the UK 2020 target, set out by the UK Climate Change Act.
- However, the Energy, Utilities and Materials sectors, covering just 24 companies in the FTSE 100, are currently responsible for 87% of all FTSE 100 reported emissions. Their average reduction rate per annum is just 1.2% per annum. This falls far short of national targets and if we continue on this trajectory, we will not deliver in line with government requirements for 2020, until 2030.
- The high intensity Materials sector accounts for 26.6% of total FTSE 100 reported emissions. CDP found that the absolute and intensity targets set by this sector, when normalised for GDP growth, will achieve an actual annual 1.5% increase in emissions.
- The Energy sector accounts for 28.6% of total FTSE 100 reported emissions, and has an average annual reduction rate of 2%. These targets are insufficient to achieve the required 2.4% annual reduction rate.
- Some Utilities companies (accounting for 31.6% of reported emissions) are thinking ahead and setting strong targets, but the average annual reduction across the sector is only 1.8% per annum, falling short of the required 2.4%.
- 77% of FTSE 100 companies report having an emissions reduction target.
- 49% of targets are absolute, compared to 31% based on intensity. 19% of target setting companies have both absolute and intensity targets.
Paul Dickinson, CEO of CDP said: “It is crucial that those sectors responsible for nearly 90% of FTSE 100 reported emissions set aggressive reduction targets. Although we see some individual companies setting strong targets, the sector average reduction targets for Materials, Energy and Utilities sectors are lagging behind what is required to meet UK government targets.”
The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of corporate climate change information in the world. Some 2,500 organizations across the world’s largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. CDP represents some 475 institutional investors, with combined assets under management in excess of $55 trillion and ensures that the financial community has access to the best available corporate climate change information to help drive investment flows towards a low carbon economy. For further information visit www.cdproject.net.
