New research by the Transition Pathway Initiative (TPI) has found that only 16 of 111 large industrial companies are on track to meet the demands of the Paris Agreement.

The TPI’s report covers businesses across the industrial sectors of diversified mining, steel, cement, paper, aluminium, chemicals and more. The research was carried out by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

The combined market value of the 95 companies failing to align with the agreement is more than $856 billion (£614bn), which the report claims could result in negative market impacts from investors.

The research shows the paper and aluminium sectors to be the least on track to achieving the Paris Agreement’s 2°C or below initiative by 2050.

The companies are more prepared to reach 2°C or below by 2030, with 22% of these businesses being ready to do so. However, the report reveals that this is due to the increased pace at which companies must decarbonise between 2030 and 2050 in comparison to the current decade. It stresses that more industrial companies must set long-term targets to 2050 that require much higher levels of decarbonisation.

The report lists the circular economy as key to helping industrial companies, deemed to be in the ‘hard to decarbonise’ sectors, to get on the right track.

Co-Chair of TPI, Adam Matthews, said: “Industrial sectors like mining and steel form the building blocks of the global economy and are some of the hardest sectors to decarbonise.

“But they account for more than nine gigatonnes of greenhouse gases and key decisions will be taken by companies and investors over this coming decade that will determine the role they will play in societies’ achievement of the Paris Agreement.”