UK (Parliament Politic Magazine) – According to a recent report by Bain & Company and the Carbon Disclosure Project (CDP), nearly two-thirds of corporate carbon emissions in the UK are not currently subject to decarbonization targets. This analysis reveals that 64 percent of Scope 1 and 2 emissions, as well as 69 percent of Scope 3 emissions, are not being addressed, highlighting a significant gap in the fight against climate change.
UK Companies Struggle To Meet Decarbonisation
The research paints a grim picture, even among companies that have set targets. It indicates that 21 percent of UK companies are projected to fall short of their 2030 targets for Scope 1 and 2 emissions, while 31 percent are expected to miss their Scope 3 targets. These figures are likely to be even higher when considering businesses that do not disclose their emissions through CDP or those that have no targets in place.
These findings align with the recent statement from the UK Government, which acknowledges that the country’s net-zero strategy is currently off track to achieve the crucial interim goal of reducing emissions by 60 percent compared to 1990 levels by 2030, as outlined in the UK Climate Report by Bain and CDP.
Urgent Need For Stronger Action
The report highlights the urgent need for stronger action to address corporate carbon emissions in the UK. The current lack of coverage and the potential failure to meet targets underscore the gravity of the situation and the necessity for more comprehensive and effective measures to combat climate change.
Companies that fail to align with decarbonization targets run the risk of falling behind impending regulations. At COP26, it was announced that UK listed companies and financial institutions would be obligated to disclose their transition plans. Similar regulations are being proposed globally, including by the US Securities and Exchange Commission (SEC) and the European Sustainability Reporting Standards (ESRS).
More UK Businesses Dislosing Emission Reduction Targets
The number of UK businesses disclosing emission reduction targets through CDP has seen a significant increase of around 130 percent between 2020 and 2022, with annual increases of 52 percent over the same period. Furthermore, UK businesses are outpacing their European and North American counterparts in decarbonization efforts.
On average, UK companies have achieved an 8 percent reduction in emissions since reporting through CDP, compared to a mere 4 percent for their international peers. Notably, certain sectors, such as fashion, have achieved even higher average reductions of 12 percent.
By failing to align with decarbonization targets, companies expose themselves to the risk of being left behind by forthcoming regulations. This was made clear at COP26, where it was announced that UK listed companies and financial institutions would be required to disclose their transition plans.
These regulations are not limited to the UK, as similar requirements are being proposed globally by the US Securities and Exchange Commission (SEC) and the European Sustainability Reporting Standards (ESRS).
UK Corportate Emissions Not Covered By Reduction Target
A report from the disclosure platform CDP and consultants Bain & Company revealed that more than two-thirds of corporate emissions in the UK are not included in decarbonization targets. Additionally, the report highlighted that at least one-fifth of companies with 2030 targets are currently not on track to achieve them.
The UK Climate Report, released on Thursday, emphasized that the actual number of companies falling behind is likely higher when considering those that either do not disclose their emissions data to CDP or have not yet established emissions-reduction goals.
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This report sheds light on a concerning reality within the UK corporate sector.
Despite the growing emphasis on decarbonization and the urgent need to address climate change, a significant portion of emissions remains unaddressed. Furthermore, a notable percentage of companies are failing to meet their own set targets, indicating a lack of progress towards a sustainable future.
The UK government has recently issued a warning that the country is not on track to achieve its end-decade objective of reducing emissions by 60% from 1990 levels. This announcement comes just months before the global climate talks in Dubai, where nations are being encouraged to establish more ambitious targets.
The lackluster progress observed among UK companies coincides with the efforts of regulators in Britain, the United States, and the European Union to enforce emissions disclosures. These regulations are expected to be implemented within the next few years.