FTSE 100 firms step up efforts to manage climate change risks
A new report has highlighted a positive trend among FTSE 100 companies taking action to manage the risks and opportunities of climate change over the past 12 months.
The study ranks FTSE 100 firms on their sustainable business practices, with scores across the four main research areas increasing by between 10-15% to 2017.
Almost a fifth (19%) of FTSE 100 firms use climate scenario analysis to model future changes in climate such as temperature and CO2 concentration. A similar amount (20%) have set science-based targets, which is double the amount of 2017, with 8% of these targets approved by the Science Based Targets initiative (SBTi).
Overall, 63% of the index use a recognised reporting framework such as the Global Reporting Initiative (GRI), while two-fifths (41%) have aligned with guidelines set out by the Task Force for Climate-Related Financial Disclosure (TCFD), which aims to mainstream climate risk into the corporate sustainability narrative.
These figures were published today (26 September) by consultancy EcoAct UK, whose chief executive Mark Chadwick said he hoped the findings would “inspire action” In the FTSE 100 ahead of the Paris Agreement coming into force in 2020.
“We want companies to understand that there are opportunities to be discovered for companies willing to embed climate change at the heart of their business strategy, from operational efficiencies to preparing for future mandatory enforcement in some jurisdictions,” Chadwick said.
“More than that, climate disclosure is about future-proofing business models to ensure sustainable investment over short term profits and, ultimately, longevity.”
Leading by example
The FTSE 100 has seen increasing levels of Scope 3 emissions disclosure (up 7% to 73%) over the past year, with a similar increase in the use of renewable energy.
The falling cost of renewables and shareholder demands for climate risk assessment are cited as significant drivers behind the trends visible in the index this year.
The impact of the TCFD is apparent in certain industries subject to intense environmental scrutiny or exposed to climate change. For instance, 100% of electricity, gas and oil supply companies report alignment with TCFD, as do 66% of real estate investment trusts and 42% of mining firms.
Telecoms giant BT scored highest among FTSE 100 firms, ousting 2017 leader Marks & Spencer (M&S), which finished second ahead of Unilever.
Last year, BT’s products helped its customers to slash their carbon emissions by 11.3 million tonnes. The company’s head of environmental sustainability Gabrielle Ginér said BT was “delighted” to be recognised by the EcoAct report.
“It’s been a very exciting year for us, setting our 1.5C science-based target and continuing to collaborate with our suppliers on environmental sustainability,” she said.
“We hope that by leading by example we can inspire others to take action. It is within our hands to catalyse carbon reduction throughout all sectors of the economy”.