Investors find gaps in climate policies

A new report assessing the climate performance of 274 of the world’s highest-emitting publicly-listed companies finds that almost half (46 per cent) do not adequately consider climate risk in operational decision-making and a quarter (25 per cent) do not report their own emissions at all, undermining a key recommendation of the Taskforce for Climate-related Financial Disclosure (TCFD).

The Transition Pathway Initiative (TPI) State of the Transition report aims to be the definitive gauge for where corporate carbon performance is at on the road to Paris. The study was carried out by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. It uses FTSE Russell data to analyse leading companies in 14 carbon-intensive sectors such as oil and gas, electric utilities, automobiles, airlines and steel. These sectors account for 41 per cent of global emissions from publicly listed companies worldwide.

TPI is backed by investors with $14tr of assets including pension funds such as CalPERS and Environment Agency Pension Fund, and asset managers such as Legal & General Investment Management, BNP Paribas, Aberdeen Standard and Robeco. This report builds on TPI’s first ‘State of Transition’ report released a year ago.

Meryam Omi, head of sustainability and responsible investment strategy, Legal & General Investment Management, said: "All sectors must play a role in meeting the climate challenge. TPI’s new report shows clearly that progress is being made, but also that significant gaps remain between the leaders and laggards in each sector. The climate emergency requires a consistent investor voice - we will continue to work alongside TPI partners to push companies to adopt sustainable business models."

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