Putting it off: CA100+ benchmark shows corporates fail on short-term targets
Companies in the CA100+ focus list are making process in setting GHG reduction targets for the long-term but are not moving fast enough to meet Paris Ambitions, according to the industry group’s annual benchmark.
More than 80% of companies in CA100+ list, which targets the world’s 170 largest emitters of greenhouse gas emissions have now set GHG reduction targets.
But the firms who are at the heart of investors’ efforts to tackle climate change are lacking short-term ambitions. Less than a third of GHG reduction targets are currently aligned with a 1.5 degree trajectory and only 13% of medium-term targets are Paris aligned, the investor coalition warned.
François Humbert, lead engagement manager at Generali Insurance Asset Management (Generali Group) and current chair of the global Steering Committee warned that there was no time to waste: “Urgent action is needed to shift the weight of focus from mere commitments to implementation. Although it’s encouraging to see more companies disclose their net zero transition plans, there’s a missing link between how these can meet the Paris agreement goals” he said.
Rebecca Mikula-Wright, CEO of the Asia Investor Group on Climate Change, Investor Group on Climate Change, and global Steering Committee member at CA100+ said: “Investors do welcome the net zero targets made by heavy emitting companies, but are still concerned by companies’ slow progress in actually implementing their plans, particularly in nearer-term timeframes. If companies have made net zero commitments, but struggle to expend capital on their decarbonisation projects because the economic settings aren’t right, they may need to help governments understand what policies will help accelerate the transition and protect their companies’ future in a net zero economy.”
New focus on climate solutions
The CA100+ benchmark has been updated this year to include updates on capital allocations to climate solutions. On this front, the investor coalition is cautiously optimistic: Just under a third (29%) of focus companies now disclose how much they have invested in climate solutions in the past year and 32% specify the value of CapEx they plan to allocate to climate solutions in the future.
In total, 63 firms, including the some world’s largest oil and gas firms and car manufacturers have disclosed their investments into climate solutions CA100+ data showed. But firms such as BP, Chevron and Exxon still fall short in reporting their investments in tackling the climate crisis, CA100+ data showed.
Do as you say?
Another growing concern for the investor coalition is the potential misalignment between increasingly ambitious climate targets and corporate lobbying practices, as Joe Brooks, program manager, CA100+ and Investor Engagement, InfluenceMap warns.
“New InfluenceMap data shows that while the number of companies reporting on and reviewing their climate policy engagement activities is increasing, many of these disclosures fail to correct misaligned lobbying practices.”
Brooks urges investors to implement more “robust” escalation strategies to ensure that corporate transition strategies are at least Paris aligned.
Indeed, a policy assessment by InfluenceMap shows that only 4% of firms in the foucs list fully align their climate policy engagement with the goals of the Paris Agreement, while 66% are only partially aligned.