Despite net zero commitments doubling in the last year, only one-in-five big emitters are on track to achieving the aims of the Paris Agreement, according to a new report.
The ‘State of Transition 2021’ report from Transition Pathway Initiative (TPI) has assessed 401 of the ‘world’s largest’ companies on their climate management and rated 292 companies on their carbon performance.
It revealed that only 17% of the 292 are set to maintain temperature rises to 2°C or below by 2050.
However, across the last year, the number of companies committing to credible net zero targets has doubled from 14 to 35.
The report demonstrates that although more companies have established climate policies, suitable management practices have not been put in place, with the ‘Management Quality’ score almost identical to last year.
TPI has highlighted stagnation in climate management across the companies, as although 17% of companies assessed moved up one or more levels on their score, 14% also moved down.
Across all sectors, electric utilities companies have reduced their emissions the most; setting them on track to achieve their 2030 targets but still not close to their ambitious 2050 aims.
Overall, no companies or sectors surveyed have been decarbonising at the required rate to achieve any of their 2050 targets and aluminium producers were shown to have increased their carbon output.
Catherine Ogden, Manager at Legal & General Investment Management, commented: “This latest report provides both comfort and concern. With a doubling of companies setting genuine net zero targets, the ranks of corporate climate leaders are swelling. But the majority of the world’s companies are not aligning themselves with the Paris Agreement. Leveraging TPI analysis, LGIM will continue to hold such companies accountable through voting and investment decisions for their climate progress”.