New research by the Transition Pathway Initiative (TPI) shows that cement and steel companies have made only modest progress in managing climate change and reducing their carbon emissions over the past year.
TPI is backed by asset owners and investors with over £7 trillion ($9 trillion) of assets under management. The assessment of companies’ carbon management and performance is carried out by the London School of Economics’ Grantham Research Institute on Climate Change and the Environment, supported by data from FTSE Russell.
Two reports, launched today, examine how the world’s largest publicly listed companies in the cement and steel sectors are managing climate change risks and opportunities, and how their emissions performance compares to international climate goals. These reports update assessments of the cement and steel sectors published in September 2017. The findings show that:
- Companies in these sectors tend to be building capacity on managing climate change, but are yet to integrate the issue into operational decision-making. A sizeable minority still do not disclose their emissions, or have not set any form of target to reduce their emissions.
- While several companies have progressed since 2017, implementing new practices to manage carbon emissions, other companies are falling back – overall there is little change on last year’s assessment.
- The steel sector remains the lowest performing sector assessed by TPI so far on carbon management.
- There is a lack of consistent disclosure of carbon emissions in the cement and steel sectors. The cement sector has developed reporting guidelines, but a number of the largest companies do not yet follow them. Disclosures are particularly inconsistent in the steel sector.
- Very few companies have set targets to reduce their carbon emissions beyond 2020, making it difficult for investors to understand whether cement and steel emissions will be reduced in line with international targets.
Commenting on the study, Professor Simon Dietz of the London School of Economics Grantham Research Institute, said: “While we see that some companies have made progress, and some examples of good practice, overall the assessment looks very similar to last year. These two sectors remain stuck in second gear on climate change.”
