London, March 2 (BUS): The corporate world is still far from aligning with global climate goals, and some countries have pulled back since signing a landmark agreement to curb global warming in 2015, data shows.
Climate scientists at the United Nations warned on Monday that limiting global temperature rise to 1.5 degrees Celsius above the pre-industrial average by mid-century was critical in order to avoid irreversible damage to the planet.
The corporate world hasn’t been moving fast enough toward that goal by reducing greenhouse gas emissions, Arabesque, a corporate sustainability data firm and asset manager, warned in an annual analysis of the world’s major markets.
To reach this target, emissions must be reduced by about 45% by 2030; However, all over the world, they continue to rise.
On average, roughly a fifth to a quarter of companies across markets are on track to meet the global target, Arabesque CEO Daniel Keeler said, even as more boards pledge to do so amid regulatory pressure and growing pressure from investors to act.
Data shared exclusively with Reuters in two markets, Germany’s DAX 40 and India’s BSE 30, showed the percentage of companies on the path to reducing their emissions toward the 1.5-degree target has fallen in the six years since the Paris agreement was signed.
In 2015, 29% of German companies agreed with the 2050 climate target, and only slightly decreased to 28% in 2021. In India, agreement fell from 25% to 24%, while in Britain, the figure remained the same at 21% .
There were signs of progress in the US, where corporate consensus on the S&P 500 benchmark rose to 22% from 14%. Japan’s Nikkei rose to 30% from 24%. China’s SSE 50 index rose to 4% from 0%.
“On a large scale around the world, there’s not a lot of progress,” Claire said. “If we want to maintain a livable world, we need to offer a 1.5-degree path. Currently, there are only 20-25% of companies that meet the criteria.”
“It is increasingly important that capital shifts to those companies that are already delivering, versus companies that have the right ambition but don’t show the right progress.”
Despite the balanced performance of the world’s largest listed companies – responsible for the lion’s share of global emissions – there were signs of improving company disclosures.
In 2021 in China, for example, 44% of companies did not disclose any climate impact to investors, down significantly from 95% in 2015.
The figures for the analysis were generated by scientific modeling of corporate climate data aggregated into ‘ESG Book’, a digital source of sustainability data backed by some of the world’s largest investors, regulators and corporations, including HSBC and Deutsche Bank.
Firms that did not disclose their climate impact were recorded as contributing to a hypothetical 3°C warming.