Companies make almost no progress on 1.5°C Paris goal since 2018

Companies make almost no progress on 1.5°C Paris goal since 2018

The world’s biggest companies have made almost no progress in the last five years towards meeting the Paris Accord climate goal of limiting global warming to 1.5°C by 2050. And overall, they are most likely to contribute to the worst-case scenario of 2.7°C or above. 

This is according to new analysis by ESG Book, the world’s largest database for corporate sustainability information. ESG Book examined the world’s mega-cap (those with a market value of US$200 billion or more) and large-cap (those with a market value of between US$200 billion and US$10 billion) companies.

ESG Book analysed the Temperature Scores of each company, comparing their publicly available emissions data with climate modelling to determine their progress towards meeting climate goals.

Of the world’s biggest 500 companies, only 18 per cent were aligned with a 1.5°C climate pathway in 2018. This improved to just 22 per cent in 2023, despite global emissions needing to fall by 42 per cent by 2030.

In 2018, 61 per cent of the climate impact of the world’s 500 biggest companies were aligned with the worst-case climate scenario of 2.7°C and above. And 38 per cent of these were not disclosing emissions at all. While this number fell to 45 per cent by 2023, with 23 per cent among these not disclosing, 2.7°C and above remains the largest grouping ahead of 2C’s 33 per cent.

Progress has been even more limited in the UK and EU, despite both committing to Net Zero by 2050. Of the UK’s biggest companies by market cap, 22 per cent were aligned with a 1.5°C pathway in 2018. By 2023, the number had barely increased, to 24 per cent. And of the large- and mega-cap companies in the EU25 per cent were 1.5°C aligned in 2023, only a 1 percentage point improvement from 2018 (24 per cent).

The US and China saw more notable progress, but from a lower baselines. In 2018, 11 per cent of the biggest US companies were 1.5°C aligned, by 2023 this increased to 20 per cent. But this is still a lower proportion than the UK or EU. In 2018, only 3 per cent of China’s largest companies were consistent with a 1.5°C pathway. This improved to 12 per cent by 2023.

Indian companies have made no progress in five years, with its proportion of 1.5°C companies remaining at 14 per cent.

In all the UK, EU, US, Chinese and Indian markets, companies are more likely to be contributing to the worse-case climate scenario of 2.7°C or higher, than the Paris target of 1.5°C.

Daniel Klier, CEO of ESG Book, said: 

“Sustainability is a collective responsibility. It’s not just about a few environmentally focused firms, it demands all global giants to actively engage, embracing the challenges that come along.

“Our data presents a clear message: we need to do more, and we need to do it quickly. Every company, regardless of its size, can and should contribute to lowering emissions.

“Transparent and accurate ESG data is vital. It not only helps identify the leaders but also shines a light on those that need to pick up the pace. It serves as a call to action for all businesses to accelerate their journey towards decarbonisation.”

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