Our new report published today finds that companies across the FTSE 100 index are responding to shareholders demands to see climate risk assessed as part of company governance.
The ‘Sustainability Reporting Performance’ report, which ranks FTSE 100 companies on their sustainable business practices, finds a step change in results across index for 2018. Scores across the four research areas increased by between 10-15% compared to 2017.
There is a continued trend of improved strategy and governance across the index. This includes:
- The use of climate scenario analysis (19%),
- Science-based targets (SBTs) [20%]
- Recognised reporting frameworks such as the Global Reporting Initiative (GRI) [63%]
- Alignment or commitment with guidelines set out by the Task Force for Climate-Related Financial Disclosure (TCFD) [41%].
There is also an increase in the use of renewable energy from 65% in 2017 to 73% in 2018 demonstrating the commercial viability of renewable energy sources coupled with an index responding to the transition towards the low carbon economy.
With a score of 91%, British Telecommunications giant BT take first place this year, ousting 2017 leader Marks & Spencer who, at 89% have finished second overall. Unilever closely follow in third place with a score of 86%.
“We are delighted to be recognised like this by EcoAct. It’s been a very exciting year for us, setting our 1.5 degree Celsius science-based target and continuing to collaborate with our suppliers on environmental sustainability. We hope that by leading by example we can inspire others to take action,” said Gabrielle Ginér, Head of Environmental Sustainability at BT.
“It is within our hands to catalyse carbon reduction throughout all sectors of the economy. Last year, BT’s products helped our customers cut their carbon emissions by 11.3 million tonnes, for example through video conferencing and vehicle telematics.”
Overall, 15% of FTSE 100 companies already report in line with the recommendation of the Taskforce on Climate-related Financial Disclosures (TCFD) on mainstreaming climate risk into the corporate sustainability narrative. The impact of the TCFD is apparent in certain industries subject to intense environmental scrutiny or exposed to climate change: 100% of Electricity, Gas and Oil supply companies report alignment with TCFD, followed by Real Estate Investment Trusts at 66%, Mining at 43%, Banks at 40% and Financial Services at 38%.
Mark Chadwick, Chief Executive of EcoAct UK, commented: “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. More than that, climate disclosure is about future-proofing business models to ensure sustainable investment over short term profits and, ultimately, longevity. In the run up to the Paris Agreement coming into force in 2020, we hope our findings inspire action in the FTSE 100 and beyond.”
We also scored companies in three other international indices – the CAC40 (Paris), IBEX 35 (Madrid) and Dox 30 (New York).
The aim of our annual research report is to acknowledge and highlight those businesses that are taking real action towards meeting ambitious sustainability plans and environmental targets, while sharing best practice when it comes to managing the risks and maximising the opportunities of climate change.
To read the full report and gain all the insights, download our report today.