Emission Disclosures Are Not Made By One Fourth Of World’s Largest Listed Companies

According to the conclusion of a new research, about half of the highest-emitting and publicly listed companies of the world do not give any proper consideration while decision making to the potential risks of their activities resulting the climate crisis while about a quarter of such companies do not make any disclosure about their carbon footprint.

And according to the group of investors coordinating the report, the results of the study also highlight the huge distance that even the largest of the listed companies of the world have to travel in order to meet the goals set out in the Paris agreement in relation to climate change.

It is mandatory that all of the publicly listed companies of the world have to make official disclosures of key financial data and the research was done one a sample of 274 of the highest emitting companies of the world hat were also publicly listed.

The research was commissioned by the Transition Pathway Initiative, a group of investors supportive of the Paris agreement, with about $14tn (£11tn) in funds under management and was undertaken by the Grantham Research Institute on climate change at the London School of Economics.

The researchers also considered a relatively smaller sample of 160 of the biggest green house gas emitting companies globally and found that only one in eight, or just 20 companies, was found were engaged in activities aimed to reduce their emissions according in accordance to the rate that is needed to meet the goal of holding temperature rises to within 2C of pre-industrial levels as taken in the Paris climate accord.

“It’s over three years since the Paris agreement was signed, and this research shows the corporate sector is improving its climate planning and performance, but not fast enough. Cutting through the noise, we can see that barely 12% of companies plan to reduce emissions at the rate required to keep global warming below 2C,” said Simon Dietz, co-director of the Grantham Institute.

The study included companies from the most important polluting industrial sectors including oil and gas, steel and aluminium, utilities, car manufacturing and air transport which together account for over 40 per cent of the total green house gas emissions among all of the public listed companies of the world.

There are some countries, including the United Kingdom, that have made it mandatory for big companies to make objective reporting of the greenhouse gas emissions that their activities make. However there are many other countries where such disclosure is not required but are encouraged to do so by many stock exchanges and investor groups.

The importance of such disclosure of carbon footprint by large companies is that such information would help investors to make informed decisions about companies to invest in, said the Taskforce for Climate-related Financial Disclosure which is supported by the Bank of England.

Investors would be taking note, said Faith Ward, co-chair of the Transition Pathway Initiative.

“This research shows clear leaders and laggards emerging within sectors from airlines to aluminium, and that gives investors an investment-relevant decision to make today. As the effects of climate change accelerate, we can expect to see more capital flow away from those companies that bury their head in the sand, and towards those companies aligning with a 2C pathway.”

(Adapted from TheGuardian.com)

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