CDP: Science-based targets needed to 'pick up the pace' on corporate action
Emissions targets from large corporates are around one-third of the way to bringing the private sector on a trajectory to keep global warming below 2C, highlighting the need for more science-based targets, new analysis from CDP has found.
The Picking up the pace report is the second edition of CDP’s “Tracking corporate action on climate change” series, and samples data from 1,073 leading corporations – including the likes of Unilever, L'Oréal and BT.
The report assessed samples of 1,829 companies, of which 1,073 responded to disclosure requests for more data on behalf of more than 800 institutional investor signatories with assets of $100trn. The sampled companies represent 12% of global emissions.
According the latest iteration of the report, 14% of the responding companies have pledged to setting emission targets consistent with the goals of the Paris Agreement by committing to the Science-Based Targets Initiative (SBTI). An additional 317 companies revealed to CDP that they aim to set science-based targets within two years.
According to the report, existing targets, the majority of which are not science-based, would take the sample companies almost 31% of the way to keeping global warming below 2C, up from 25% last year.
CDP’s chief executive Paul Simpson said: “Two years ago, the Paris Agreement fired the gun in the race to a low-carbon economy. This year, the recommendations from the Task Force on Climate-Related Financial Disclosures accelerated the pace. We can already see corporate winners and losers emerging.
“That’s great news for those companies seizing the opportunity of the low-carbon economy, but the rest need to pick up the pace or risk losing out. The majority of the large corporations we analysed do not yet appear to have the right, science-based targets in place to successfully transition their business in line with the Paris Agreement, although many have ambitions to take this step in the next two years. We strongly urge them to follow through and align their targets with climate science, to ensure their resilience in the transition to a well below 2-degree world.”
In total 151 of the sampled companies have committed to the SBTI, compared to 94 last year. Companies such as Dutch paints manufacturer AkzoNobel have all committed to the initiative in the last 12 months.
Overall, more than 300 companies are now signed-up to the SBTI, which works as a partnership between CDP, WRI, WWF and the UN Global Compact. In 2017, more than 90 companies joined the initiative.
Climate A list
One important trend highlighted by the report is the growing level of involvement from boardrooms regarding climate issues. Climate change is now a board-level topic for 98% of companies and 90% have financial incentives attached to corporate climate targets.
The report also outlined that more companies are mapping out a “low-carbon future”. In total, 89% have emissions reduction targets – up from 85% in 2016 – and 65% have targets up to at least 2020. Some companies have pushed beyond this timeframe, with 20% setting long-term targets to 2030 and beyond.
Around 75% of the companies claim that their products and services will enable third parties to reduce emissions, up from 64% in 2016, while 32% are now using internal carbon pricing.
The number of companies in the sample committing to a renewable energy target – such as BT and Unilever’s involvement with the RE100 – increased by 23% and more than a third of companies are offering low-carbon products such as electric vehicles.
As part of the annual update, CDP also released separate analysis detailing the companies that received an A-grade for their approach to combating climate change. This year, 112 companies out of more than 2,400 were placed onto the “Climate A list” for their performance.
Both Unilever and L'Oréal lead the way on the A list, scoring A’s across all three areas of climate change, water and forests. Other companies that received at least one A grade include Ford, Sky, Sony, Danone, Coca-Cola European Partners and Bank of America.