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Energy firms still lag over environment

23 October 2020

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NONE of the main energy companies is on track to cut its emissions enough to reach the Paris agreement’s target of 2°C warming by 2050, a Church of England-backed study has concluded.

The Transition Pathway Initiative (TPI) research examined the “carbon performance” of 59 publicly listed fossil-fuel firms, and found that not a single company was aligned with the UN-agreed goal of limiting global temperature rises to just 2°C above pre-industrial levels.

Although many high-profile companies have made pledges on cutting carbon emissions in recent years, none has yet gone so far as to meet the target aimed at ensuring that climate change does not accelerate.

The TPI was established in 2017 by a coalition of the C of E’s national investing bodies and other ethically minded funds, to help investors to assess how effectively a firm is addressing the challenges of climate change (News, 13 January 2017). The investors involved have funds amounting to $22 trillion.

The director of ethics and engagement of the C of E Pensions Board, Adam Matthews, co-chairs the TPI. He said that a handful of firms were now aligned to the emissions pledges made by nations in the landmark Paris agreement, but even this would mean that global temperatures would rise by about 3.2°C, causing destructive and lasting damage to the environment.

“Investors have witnessed a flurry of significant climate announcements by fossil-fuel majors this year; so it is striking this independent research still shows those commitments do not yet align with limiting climate change to 2°C,” he said.

“There has been some movement, with seven European companies now aligned with the Paris pledges, and Shell, Total, and Eni getting close to meeting the 2°C benchmark. But US fossil-fuel giants have yet to take meaningful action to reduce their emissions, and the gap with their European peers is stark.”

The author of the TPI report, Professor Simon Dietz, said that the fossil-fuel energy firms had not yet grasped how climate change was an existential threat to their business. “For oil and gas companies, the route to Paris alignment is much more of a challenge to their basic reason for being. Some companies have started grappling with this challenge, but none have met it yet,” he said.

Alongside a failure to begin cutting emissions from their activities, most of the conglomerates studied were also still part of lobbying groups which were battling against the transition to sub-2°C warming.

Anglican investing bodies have been gradually taking a harder line on the most intransigent fossil-fuel companies. In January, the Pensions Board announced that it would no longer invest in BP, or the American giants ExxonMobil and Chevron, until they set emissions targets in line with the Paris agreement (News, 31 January).

Previous TPI reports have found that almost all the positive momentum towards cutting emissions in the sector were in Europe. None of 42 companies headquartered elsewhere in the world had made commitments in line with the less ambitious pledges made at the Paris agreement (News, 22 May).

 

Management Quality and Carbon Performance of Energy Companies: September 2020 Update is at www.transitionpathwayinitiative.org

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