Market News

 August 27, 2009
World's biggest firms must double pace of carbon cuts - CDP

 GLOBE-Net - Many of the world’s 100 largest companies are setting targets to cut their greenhouse gas (GHG) emissions, but they must double the pace of action to avoid dangerous climate change, a report by the Carbon Disclosure Project (CDP) and UK telecoms firm BT has concluded.

"While 73% of Global 100 companies have set some form of reduction target, the majority need to be far more aggressive if they are to achieve the long-term reductions required," said CDP chief executive Paul Dickinson.

The 100 biggest companies in the world are set to reduce emissions by 1.9% a year on average, the CDP found, but reductions of 3.9% a year will be needed to cut emissions in developed economies to 80% of 1990 levels by 2050 - the scale of reductions required to avoid climate catastrophe, according to the Intergovernmental Panel on Climate Change’s (IPCC’s) 2007 report.

The Carbon Chasm suggests these companies will reach the scientifically recommended level of GHG reductions in 2089, or 39 years too late to avoid dangerous climate change.

The findings are based on the CDP’s 2008 report - each year, the CDP, on behalf of a coalition of institutional investors with $55 trillion assets under management, sends a wide-ranging survey to companies worldwide, asking for data on their carbon emissions, and the risks and opportunities presented by climate change.

Most of those companies’ targets are still relatively short-term, with 2010 and 2012 being the most popular deadlines. Only 16% of companies reported targets after 2012 - the end of the first Kyoto period, the report found. Companies setting mid- or long-term targets include E.ON, Procter & Gamble, Vodafone and Wal-Mart, the report said

The report suggests that big business is waiting for a lead from the international climate change negotiations in Copenhagen this December, which are intended to establish a post-2012 regime: "The high proportion of targets which run to 2012 suggests that a global deal in Copenhagen is essential to provide businesses with more certainty on credible long term reductions."

Some companies failed to disclose the start date or baseline year for their targets, which the CDP said makes it "hard to judge the quality of these targets".

All companies should set emissions reduction targets, the CDP recommends, and these targets must have clear baseline and target years. These targets should reflect the IPCC’s recommendations, the CDP argues. Although targets which set absolute cuts in emissions are preferred because they are clearer, the report says aggressive targets based on emissions-intensity "can also deliver" the cuts needed.

The full report is available here

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