Top 100 UK carbon emitters named as warning to investors

The oil company is responsible for 23% of all emissions from FTSE 100 companies, closely followed by BP and Scottish Power who account for 17% each, while the Corus Group and BHP Billiton are responsible for 6% and 4% respectively.

The results are revealed in a report, The Carbon 100, published by Henderson Global Investors using research from consultancy Trucost, which evaluates the total carbon emissions of the FTSE 100.

It shows that just five sectors – oil & gas, electricity, mining, steel and leisure – generate 85% of direct carbon emissions despite accounting for only 29% of market capitalisation.

In total, direct global carbon emissions from the UK’s 100 largest companies amounted to 480 million tonnes of CO2 equivalent – about 73% of the UK total. This is equivalent to 1.6% of the global total of greenhouse gas emissions. The UK was responsible for 2.2% of the global total, but FTSE100 firms have a larger effect due to the global nature of their businesses.

In addition, carbon dioxide emissions from the products sold by five UK oil and mining companies account for over 10% of total global emissions.

The report calls for improved disclosure from companies about their emissions so that investors can make more informed decisions. At present less than half of the FTSE 100 disclose their carbon emissions.

“Henderson is one of the first investors to look at the risks posed to companies by carbon constraints,” said Simon Thomas, chief executive of Trucost. “Trucost’s quantitative, comparable data enables them to better understand these risks. By using quantitative metrics, The Carbon 100 demonstrates the financial significance of carbon emissions to the FTSE100.”

Nick Robins, Head of SRI Funds at Henderson added: “The new operating and financial review reporting requirements provide an important opportunity for companies to make the linkages between climate change and core value drivers.”

However, given the lack of current disclosure and the difficulties in finding out how much CO2 equivalent companies produce, not just directly but across the supply chain, the immediate chances for investors to make a truly informed decision look slim.

By David Hopkins