81% of listed companies lack a robust plan for net zero according to climate reporting research

New Climate Reporting Performance analysis highlights the need for COP26 to demonstrate clear leadership on climate and drive ambitious legislation and business frameworks for real emissions reductions.

London, UK, October 25, 2021 – EcoAct, an Atos company, has today released The Climate Reporting Performance of the FTSE 100, Euro STOXX 50 and DOW 30. The report, which includes a leader board ranking the top 20 companies for climate disclosure, found that just 19% of companies within the research group have long-term emissions reduction targets to meet net-zero goals and only 2% have a long-term emissions reduction target aligned with limiting global warming to 1.5°C with most having no provision for sequestration.

The report notes almost two thirds of companies (65%) are now committed to net zero. The FTSE 100 compares favourably against the Euro STOXX 50 and DOW 30 with 66% committed compared with 64% and 63% respectively. This represents a marked increase on previous years, in particular, commitments within the DOW 30 have more than doubled from 30% in 2020. The research also notes year-on-year increases in the number of companies setting science-based targets with 65% of companies now having set one. Furthermore, many more of these SBTs are in line with a well below 2⁰C or 1.5⁰C scenario – from 20% last year to 51% this year. Despite this, the report cautions that less than a fifth of businesses across all indices are able to demonstrate that they have a robust long-term plan for reducing emissions and removing carbon in order to make these goals achievable.

Up to nearly 80% across all indices, with many commercial sectors including insurance, oil and gas and consumer vehicles and parts, demonstrated alignment with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations – the biggest year-on-year increase since they were launched. Developed by The Financial Stability Board, the TCFD recommendations provide a clear example of how governments globally can come together to create a framework that achieves a common climate goal.

The analysis revealed that with clear frameworks to follow – such as the TCFD recommendations and the Science-Based Targets Initiative (SBTi) – more and more businesses are demonstrating governance on climate change and committing to short- and medium-term targets. However, the report highlights the importance of COP26 to agree the global pathway to net zero, and the vital need for clear government policy to support and incentivise long-term emissions reductions aligned to 1.5°C.

Commenting on the findings, Stuart Lemmon, Managing Director, Northern Europe, EcoAct said: “Businesses have a vital role to play in tackling climate change but need to be led by more ambitious long-term policy and regulation, underpinned by realistic frameworks to work within, to achieve net zero. The outcomes of COP26 will be pivotal for turning intent into action.

“Our analysis shows that when businesses have a clear framework to follow, the uptake on climate change action is vastly accelerated. This decade represents our very last chance to implement the climate policies and strategies that will see us achieve net-zero. We no longer have time to rely on a minority of leading climate change actors. All governments, businesses and society at large must do everything they can to drive rapid and meaningful change.”

Globally, top performers across all indices this year are Microsoft, Apple, Landsec, Vodafone and Schneider Electric. The Information, Technology and Telecommunications (ITT) and Biopharmaceuticals industries are the stand out sectors this year, replacing Utilities and Banking.