CDP: Only a handful of FTSE 100 firms prepared for climate transition plan mandate

That is according to CDP, which has today (13 June) launched an interactive, open-source digital tracker of sustainability governance, planning and progress.

The tracker covers data from a sub-set of the 18,600+ companies who disclose climate-related information through CDP. Collectively, these businesses account for 16% of annual global emissions. The majority of the FTSE100 and S&P 500 are included in this cohort.

A headline finding is that, while the majority (60%) of the companies have targets to reduce emissions, less than 1% are producing transition plans to net-zero that CDP regards as credible. Key facets of a good transition plan include interim emissions targets, financial planning to deliver decarbonisation and assessment of climate-related risks.

Transition planning was found to be weak among the FTSE100, despite the fact that the UK will soon mandate the transition plan disclosures from large businesses in high-emission sectors. Of the 91 firms that disclose through CDP, only four have plans including all key facets.

This is the latest in a long line of warnings over unpreparedness for transition plans. In April, EY stated that only five of the FTSE100 had plans aligning with the Government’s recommended framework.

Targets off track

As noted above, the global average for transition plan production is 1% – meaning that UK-based large businesses are faring better than their global competitors in this regard. CDP has kept data for the tracker aggregated; businesses are not named individually at this stage.

On a global basis, the tracker reveals that emissions target setting in and of itself may not be as widespread as one may assume. 40% of the companies included in the tracker have no emissions targets. 93% have not yet set targets through the Science Based Targets Initiative (SBTi).

Of the companies with climate targets, only one-third are currently either on track or almost on track to meet them. CDP has called the gap between ambition and delivery “worrying”.

CDP’s founder and chair Paul Dickinson said: “The tracker shows only 24% of disclosing companies, covering 5% of emissions, are on track to meet their targets. Despite the innovation displayed by the leaders, action overall is not at the level we need, and with time running out to transform our global economy, we are placing our Tracker into the hands of the world’s climate data users.

“I hope that this increased transparency is a clear signal of CDP’s commitment to enabling the transformative action we must see to have any hope of limiting warming to 1.5C”.

CDP’s new tool has been launched in the same week that Net-Zero Tracker launched its latest stocktake of target-setting by nations, regions, cities and large businesses.

In the private sector, the Tracker documented only incremental improvements in target credibility. While two-thirds of the world’s largest 2,000 listed companies have a net-zero target, only 4% have targets aligned with the minimum requirements of the UN-backed Race to Zero Initiative.

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