FTSE 100 climate commmitments may lead to increased emissions

By staff writers
October 3, 2007

Campaigners from Christian Aid yesterday (Tuesday 2 October) published the results of research which shows that most of the UK’s FTSE 100 companies have not committed to targets for absolute reductions in their greenhouse gas emissions.

The research shows that only a small minority of companies surveyed have targets for reducing total greenhouse gas emissions in the future, with more citing ‘intensity’ targets where emissions relative to company growth and increased product delivery will be cut.

These ‘intensity’ targets do not guarantee that greenhouse gas emissions from FTSE 100 companies will fall; instead companies can say that the amount of carbon emissions needed to produce and sell a benchmark product will fall whilst the total amount of the companies’ emissions rise as their business grows.

"Poor people are already suffering the impact of climate change as a result of the build up of greenhouse gases in the atmosphere," said Paul Brannen, head of campaigns at Christian Aid. "What they need is for total emissions to fall dramatically and not just for production to become more efficient."

Christian Aid sent a letter and survey questions to all FTSE 100 companies in March 2007. Almost half responded, with 47 producing substantive replies in answer to Christian Aid’s questions regarding disclosure of Scope 1, 2 and 3 emissions, targets for reductions in emissions of greenhouse gases, and company positions on whether the government should introduce mandatory disclosure.

Results of the survey show high awareness of the issue of climate change among the FTSE 100 companies and a willingness among some to face greater regulation as a result. But disclosure of current greenhouse gas emissions is still very patchy, with standards varying widely from company to company, and absolute reduction targets a rarity.

"We recognise that reducing carbon intensity in production is an essential step towards reducing emissions, but the impression that many companies leave is that they are reducing their overall impact, and this is by no means guaranteed unless reductions are absolute," said Paul Brannen. "This once again demonstrates the need for the government to set mandatory standards for measuring and reporting emissions so that it is clear exactly how much is being emitted and whether the cuts are making a difference."

Currently, fewer than one in five companies have absolute emissions reduction targets and only seven companies have a time-bound target equivalent to cuts of five per cent a year. Rather than absolute reduction targets, many companies (almost one-third) have ‘intensity’ targets which are commitments to reduce the amount of emissions produced per product or given amount of revenue.

For companies with intensity targets (accounting for the majority of companies which have emissions targets), it is possible that, while emissions per unit of production will decrease, total emissions may increase as long as the company’s business grows. Around one in five companies are planning emissions targets, whilst the remainder (about one third) did not provide data or were against annual targets.

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