Only 1% of firms in high-emitting sectors have aligned their future capital expenditures with long-term decarbonisation goals, new research suggests.
The Transition Pathway Initiative Centre (TPI) at the London School of Economics (LSE) accessed the transition plans of more than 1,000 global companies.
The centre’s analysis, published on Tuesday, includes the largest companies in sectors like oil and gas, steel, and coal mining.
The firms covered collectively constitute at least 90% of the total market capitalisation of those high-emitting sectors, the centre said.
The researchers found that only one in 20 companies have disclosed quantified plans on how they will meet their greenhouse gas targets.
On particular actions, only 1% of companies have aligned their future capital expenditures with long-term decarbonisation goals, while only 2% have committed to phasing out capital expenditure in carbon-intensive assets or products.
Meanwhile, only 2% have clarified the role that will be played by offsets and negative emissions technologies within their transition plans.
The analysis also suggests that only 52% of companies have undertaken climate scenario planning and only 48% have incorporated climate risks and opportunities into their long-term strategies.
Less than half (45%) have disclosed the actions they will take to meet their emissions reduction targets.
While 73% of firms have shared some scope three emissions data – those from their suppliers and products sold – there is a steep decline to 34% of firms sharing materially important scope three emissions.
However, the researchers identified areas where companies have performed better in terms of decarbonisation efforts.
They found that 84% are disclosing emissions targets, 98% are disclosing policy commitments to act and 92% are sharing data on their scope one and twoemissions – those from operations and energy use.
Meanwhile, 83% have outlined the board’s responsibility when it comes to decarbonisation.
Some sectors were found to score better in terms of comprehensive climate plans, targets and actions, which included electrical utilities, oil and gas, consumer goods and airlines.
But coal mining, cement, paper and shipper scored the lowest across the board.
Simon Dietz, TPI Centre’s research director and professor of environmental policy at LSE, said: “These results show that while companies’ management and governance of climate change have in many ways improved, they have yet to come up with the detailed, quantified and costed transition plans needed in this critical decade.”