Footsie falls short. Britain’s biggest listed companies aren’t doing enough to combat climate change. Not even close. Newly updated Tortoise data shows that FTSE 100 companies overall
- aren’t cutting their emissions fast enough;
- are on a pathway which if followed by the rest of the world would lead to a catastrophic 2.8 degrees celsius of warming;
- are on average emitting more from their own operations year-on-year.
In human terms: current FTSE 100 emissions reductions targets are inadequate to maintain a habitable planet for millions of people.
Total CO2 emissions by these companies are down slightly this year compared with last, but that is chiefly because of the exit of three mining companies rather than an improvement in performance, according to an analysis of the Responsibility100 Index, published today.
Most FTSE 100 companies have net zero plans but their medium-term targets are not deep or rigorous enough to help keep the world on a temperature pathway of 1.5C above pre-industrial levels, the aim agreed under the Paris accord with the goal of avoiding the worst impacts of climate change.
The Responsibility100 Index, which was launched in 2019, compares companies’ commitments to their performance across measures including climate, equality and employees’ well-being. Unilever is in top place in the Index, followed by AstraZeneca and NatWest. Airtel Africa comes lowest on the ranking.
Other key findings from the newly updated Index analysis include:
- FTSE 100 chief executives’ pay soared by an average of 31 per cent last year.
- But 16 companies, including big employers like Tesco, Sainsbury’s, Compass Group and Associated British Foods (owner of Primark), have a majority of employees who earn less than £25,200, considered the minimum acceptable standard of living.
- 47 FTSE 100 companies have no female senior executives.
- Employee satisfaction fell for more than three quarters of reporting companies.
Last year the top ranking in the index was held by Severn Trent Water. This year the company falls to 12th place, largely because of fines related to sewage incidents included in ranking calculations for the first time.
Just 47 of the companies in the index have set science-based emissions targets endorsed by the Science-Based Targets initiative (SBTi), a scheme regarded as the gold standard for corporate carbon reduction.
The SBTi, which works with thousands of businesses, requires companies to set targets based on reducing emissions either in their own operations or their supply chain.
Offsets are only accepted for additional reductions beyond a company’s net zero target and the initiative does not count avoided emissions – reductions which come from the use of a company’s products, such as fuel-efficient tyres.
Shell, BP, Glencore, Rio Tinto and Anglo American are among major emitters on the London index whose emissions are not covered by the targets.
As of this year the SBTi is not validating commitments from fossil fuel companies. But even when it was, the big emitters on the FTSE were either choosing not to make them or setting their sights low.
Shell, Glencore, Anglo American and Rio Tinto all said they were aligned or broadly aligned with the Paris goals – although spokespeople for several companies noted there is currently no standard methodology to determine whether companies’ targets align with the goals.
A temperature rise above 2C brings with it living conditions that will be hard to tolerate for millions of people, including longer heatwaves and more severe droughts.
To see the full rankings and analysis, visit The Responsibility100 Index site.