UK companies falling behind on decarbonisation targets: Report

The research reveals a bleak picture even among companies setting targets. It finds that 21 per cent of UK companies are expected to miss their 2030 targets for Scope 1 and 2 emissions, while 31 per cent are set to miss Scope 3 targets. These numbers are likely even higher, considering businesses not disclosing through CDP or those without any targets.

These findings align with the UK Government's recent statement that the country's net-zero strategy is currently on track to miss the key interim 2030 goal of reducing emissions by 60 per cent compared to 1990 levels, as per the UK Climate Report from Bain and CDP.

Companies not aligning with the decarbonisation targets face the risk of falling behind incoming regulation. At COP26, it was announced that UK listed companies and financial institutions would be required 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).

The number of UK businesses disclosing emission reduction targets through CDP increased around 130 per cent between 2020 and 2022, with 52 per cent annual increases over the period. Moreover, UK businesses are decarbonising faster than their European and North American counterparts. On average, UK companies have reduced emissions by 8 per cent since they began reporting through CDP, compared to just 4 per cent for their international peers. Specific sectors, such as fashion, have seen average reductions of 12 per cent.

The analysis also emphasises the financial benefits of effective decarbonisation. Companies identified as ‘Effective Decarbonisers’ are generating significantly more value, capturing 1.3 times more opportunities than ‘Carbon Laggards.’ They also identify more valuable opportunities, with a projected lifetime financial impact 1.6 times greater for each opportunity on average.

The success of Effective Decarbonisers is credited to their proactive integration of decarbonisation into their business strategies, including the use of both financial and non-monetary incentives.

ALCHEMPro News Desk (DP)