Many companies in high-emission industries are off-track on their way to meeting the goals outlined in the Paris agreement on climate change, found a new report produced for some of the world’s biggest institutional investors that was published on Wednesday, July 10th.
The London-based Transition Pathway Initiative (TPI) is a global initiative led by asset owners and aimed at investors which assesses companies’ preparedness for the transition to a low-carbon economy.
New research released by TPI, the TPI State of Transition Report 2019, urges investors towards “emergency footing”.
The initiative examined 274 publicly listed companies in sectors such as automobiles, mining, and steelmaking to put together a report which concluded that almost half of those companies do not adequately currently consider the risks of climate change when making business decisions. A quarter of the companies examined simply refrain from reporting their greenhouse gas emissions altogether.
According to the Associated Press (AP), the report stated explicitly that out of the 160 companies studied, only one in eight is reducing emissions in line with the 2015 Paris climate accord’s goal of keeping global warming below 2°C by the end of the century.
Companies’ responses to climate change are becoming increasingly important to investors, as they often are either concerned about companies getting hit by restrictions or want to invest in environmentally ethical companies that are conscious of climate-related issues.
“Broadly speaking we see more progress than we see backsliding,” acknowledged Simon Dietz, a professor of environmental policy at the London School of Economics who co-wrote the report. “But most companies are not progressing,” he added, according to AP.
TPI is backed by investors that together manage over $14 trillion in assets, including the California Public Employees’ Retirement System, British insurer Aviva, and Swiss bank UBS. The initiative said its network urges investors to adopt “an emergency footing” to get companies moving faster on climate and to avoid a “Catch 22 on disclosure”.