Industrial sector failing to align with climate goals
Less than a fifth of the world’s largest listed industrial companies have emission reduction plans aligned with limiting global warming to 2˚C above pre-industrial levels.
That is according to new research by the Transition Pathway Initiative (TPI), which studied the carbon performance of 72 paper, cement, steel and aluminium firms.
It found that just 19% of these companies are aligned with a 2˚C pathway – the lower ambition of the Paris Agreement – and that the aluminium and steel sectors have shown no progress since 2018.
“Most industrial companies are significantly off-track on climate and that is an abdication of corporate risk management that must be urgently corrected,” said TPI co-chair, Faith Ward.
“These industries must transform themselves if they are to survive the low-carbon transition and play their part in achieving the goals of the Paris Agreement.”
Despite slow progress, the TPI found that 29% of the largest listed industrial companies are set to align their emissions with the Paris pledges by 2030, up from 24% in mid-2018.
The think tank also assessed the climate management quality of 100 firms across the paper, cement, steel, aluminium and chemicals sectors, which account for two-thirds of direct industrial CO2 emissions.
It found that the proportion of companies disclosing their emissions has increased from 61% in 2018 to 76%, with much of the improvement coming in Asia and Russia.
In addition, the number of industrial companies that have set a 2030 target aligned with the Paris Agreement or better has increased from five to 14 over the last two years.
Particular improvements are visible in the cement and paper sectors, where the number of companies aligned with the Paris pledges has risen from two to five, and 10 to 18 respectively.
“Industrial sectors like steel and cement face tough challenges to decouple emissions from production," Ward said.
"But make no mistake, these industries must transform themselves if they are to survive the low-carbon transition and play their part in achieving the goals of the Paris Agreement."
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Chris Seekings is a reporter for TRANSFORM