AI predicts that FTSE100 firms unlikely to meet net-zero commitments

An AI language model has analysed the commitments, data and marketing of the FTSE100’s climate claims and targets and has found that less than 20% are on track to become net-zero businesses.

AI predicts that FTSE100 firms unlikely to meet net-zero commitments

The AI modelling warns that some FTSE100 companies may be inadvertently or deliberately greenwashing their climate claims and plans as a result

The AI language model created by Permutable AI monitored ESG commitments and corresponding emissions data of the FTSE100. AI technology was used to track the specific number of announcements from each of the FTSE100 organisations in relation to climate. Announcements covered include achieving carbon neutral status, net-zero ambitions and setting emissions targets (for Scopes 1, 2 and 3).

The AI modelling found that more than half of the FTSE100 do not have data available on net-zero targets, but that 56 do have available data sets on short and long-term decarbonisation trajectories. However, of these 56 companies, Permutable AI has found that 34 cannot “feasibly achieve” at least one of their climate goals.

The analysis found that 50% of the index is yet to set verified science-based targets and that less than 20% are on course to meet their net-zero ambitions.

Permutable AI’s chief executive Wilson Chan said: “AI is going through another global boom right now. While some people are concerned about the negative impact, our data proves that it really can be a powerful tool for good; one that will be integral in helping us to navigate the climate emergency.

“Our AI language models have been trained to recognise patterns and spot anomalies within an organisation’s communications around its green initiatives and it’s clear that a significant number of the FTSE100 are either not doing enough, are failing to set verified SBTi targets, or are misleading the public about the steps that they are taking.”

The AI modelling warns that some FTSE100 companies may be inadvertently or deliberately greenwashing their climate claims and plans as a result.

The analysis builds on findings from CDP last month that revealed that just four FTSE100 companies have net-zero transition plans that would meet the ‘gold standard’ requirements of the UK’s forthcoming reporting mandate.

In April, EY stated that only five of the FTSE100 had plans aligning with the Government’s recommended framework.

Commenting on these findings, John Willis, Director of Research at Planet Tracker, said: “This report shows the importance of closely examining the data behind climate claims. When corporates make misleading statements about their climate strategies and targets, the risks have dramatically risen in recent months. Two sets of regulators are looking into this, consumer and financial ones.

“Quite rightly, climate and environmental statements have to be backed up with evidence. This AI analysis suggests that many UK organisations should be thinking hard about making net zero commitments based on their present publicly available data. Furthermore, if this is the case, investors owning them in sustainable funds may also be at risk of greenwashing.”

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