Data from CDP’s supply chain report has revealed that in 2021 only 44% of major companies’ suppliers had climate targets, but only 1 in 40 of these were approved, science-based targets aligned with efforts to stay below 1.5°C of global warming.
Sonya Bhonsle, global head of value chains at CDP, stated “Our data shows that corporate environmental ambition is still far from being ambitious enough. Companies have the blinkers on when it comes to assessing their indirect emissions and engaging with their suppliers to reduce them.” Companies should be encouraged to align their climate targets and the way they work with suppliers to lessen their exposure to ESG risks.
When it comes to climate action, (Scope) 3 is the magic number.
The Transition Pathway Initiative launched new sectoral decarbonisation pathways this week for the top 10 highest emitting sectors in energy, transport and industrials. Essentially, presently the path to net-zero is unclear and ill-defined, and companies should no longer be trusted to “mark their own homework” since not enough progress is being made. These pathways quantify the steps each sector will have to take if they wish to reach net-zero by 2050.
Adam Matthews, chair of the TPI, said: “TPI’s sectoral decarbonisation pathways meet the demand from all stakeholders for a credible, rigorous framework for assessing corporate climate change performance. They are recognised by investors as the authoritative translation of the IEA’s scenarios into credible performance benchmarks for industry sectors and for individual companies.”
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The Climate Action 100+, the world’s largest investor initiative with an unprecedented $60 trillion in assets, has been placed under pressure by a new report published by campaign group Majority Action. CA100+ members were found to have voted for directors at companies that failed compliance checks with Net-Zero benchmark indicators. The report urged CA100+ investors to act against such “greenwashing” and be more willing to vote against chairs at companies where there are poor environmental standards.
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Cube, a fintech that scans regulatory announcements, has investigated recent proliferation of environmental regulation. In 2021, 95.3% of all issuances made direct reference to ‘climate change risk’, with the EU leading the way in this field, accounting for 47.22% of climate-related issuances globally. Moreover, 63% of climate-related issues published between 2017-2021 were published last year.
Climate change regulation is accelerating, perhaps offering hope for the future as destructive activities become increasingly legislated against.
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