World’s largest companies are set to miss GHG emissions cuts

‘The Carbon Chasm’, produced by the independent not-for-profit Carbon Disclosure Project (CDP), in association with BT – shows that the Global 100 companies are currently on track for an annual reduction of just 1.9 per cent per annum. The report argues that big business is unlikely to set more realistic targets if governments don’t lead the way with a deal in Copenhagen in December.

Annual cuts of 3.9 per cent would be needed in order to cut emissions in developed economies by 80 per cent in 2050, the minimum the Intergovernmental Panel for Climate Change (IPCC) has said is necessary to avoid dangerous climate change.

BT’s chief sustainability officer Chris Tuppen said: “Most large companies now measure their carbon footprint and many have set carbon reduction targets. But how many of those targets are actually in line with the required reductions to prevent dangerous climate change? The research highlights a significant gap between what is needed from the corporate sector and what’s currently promised.  We in the business world need to find a way of closing this carbon chasm.”

The report has a number of recommendations for how to do this. The first is that every company should, as a minimum, set a CO2-equivalent reduction target.

The CDP research showed that 27 per cent of the Global 100 currently set no reduction targets at all, but of those that do, CO2-equivalent reduction targets are the preferred approach; adopted by 62 per cent, compared with 15 per cent based on energy consumption and nine per cent based on energy efficiency.

The report also argues that targets must have clear baseline and target years, but concedes progress on this is unlikely to be made in the short-term without action from governments.

The CDP research shows 84 per cent of the target deadlines set by big business are for 2012 or earlier, which correlates with the final year of the Kyoto Protocol. The report concludes that businesses may be waiting to hear outcomes of the UN Conference of the Parties meeting in Copenhagen this December before setting longer term reduction goals.

It adds that with just 16 per cent of targets set beyond 2012, government leadership is required to stimulate longer term target setting.

The report concludes that the absence of a standard framework for setting emissions reduction targets has led to “a patchwork of company specific targets, which have developed from individual company priorities and market forces”.

Although the report recognises that “greater harmonisation in setting targets in line with the science is required”, the research suggests a ‘on-size-fits-all’ approach won’t work. The research participants argued that sector and company differences could result in skewed data or incentives and reduce transparency if one target methodology was applied across the board.

Commenting on the research findings, Paul Dickinson, ceo of CDP said: “While 73 per cent of Global 100 companies have set some form of reduction target, the majority need to be far more aggressive if they are to achieve the long-term reductions required.  

“This is a time of huge opportunity for businesses to gain competitive advantage by reducing their own impact on the climate and benefit from associated cost savings, as well as sparking major innovation around the production of new, lower carbon products and services.”