The world's companies are not on track to keep carbon emissions low enough to avoid significant and potentially catestrophic climate change.
The Transition Pathway Initiative (TPI) has released its annual State of Transition Report which assesses the current state of transition to a low-carbon economy.
It shows that more than 80% of companies assessed by TPI were off track for a 2-degrees world. The goal of the 2015 Paris Climate Agreement was to keep the world's temperature from rising more than 2 degrees to avoid severe, catastrophic impacts on the planet.
TPI assessed 332 companies on their ‘Management Quality’ (their management/governance of greenhouse gas emissions) and 238 on their ‘Carbon Performance’ (the extent to which the companies are, or will be, aligned with the global temperature goals set out in the 2015 UN Paris Agreement on climate change).
The report found there had been some progress across all sectors, with average emissions intensity falling by 1.9 degrees annually.
Electrical utilities and paper companies are on course to beat their 2025 targets if they continue to cut emissions by 4% each year.
However, oil and gas companies are unlikely to meet their targets without making bigger cuts to their emissions, and oil, gas and airline sectors are the worst performing sectors across the TPI data set for 'carbon performance.
The report concludes: 'Although we can see improvements, we need to rapidly increase our pace in cutting carbon emissions if we are going to carb temperature rises.'
Read the full report here.
State of Transition webinar
TPI hosted a webinar, joined by more than 450 investors, to discuss the State of Transition and the importance of investor stewardship. You can watch it here. Please note, you will have to sign up to a BrightTalk account.