Analysis: Less than 1% of listed companies have committed to fund their own decarbonisation

Review of 2,000+ firms reveals gap between net-zero pledges and spending plans, with some sectors making more progress than others 

Less than 1% of listed firms have made a public commitment to align their financing plans with their decarbonisation goals. 

That’s according to an assessment of more than 2,000 companies by the Transition Pathway Initiative (TPI), an investor-led project run by the London School of Economics. 

Its latest annual update concluded that most firms were integrating climate into operational decision-making, but not into strategic planning. 

Just 0.5% had committed to align their capital expenditure with their climate goals, while 2% had pledged to phase-out spending on carbon-intensive assets or products.  

Around 10% of the sample had measures in place to help ensure they aligned their internal climate policy positions with their trade association membership. 

Another 10% disclosed their reliance on carbon offsets to meet their climate targets. 

TPI’s research manager, Ali Amin, told Real Economy Progress that larger developed markets companies tended to perform better when it came to managing the transition, but that “credibility is lacking on core components” across the board.  

The report also assessed the carbon performance of 554 companies from 12 key sectors, including aluminium, oil and gas, and coal mining.  

It found the proportion tracking a 1.5°C benchmark had risen from 9% to 30% in the past five years, but collectively the firms were still set to “overshoot their 1.5°C emissions intensity budget by 61% and their 2°C budget by 13% between 2020 and 2050”.  

Shipping was the only sector tracking below its 1.5°C benchmark, according to the research, and this was driven by the climate goals of Moller-Maersk and Hapag-Lloyd. 

This week, also saw S&P Global estimate the proportion of electric utilities generating most of their electricity from low-carbon sources will rise from about a third today, to more than half by the mid-2030s.

“However, only a third of power utility companies with fossil fuel assets have identified concrete actions to phase them out,” S&P noted, adding that regulatory and policy uncertainty, infrastructure bottlenecks, labour availability and capital constraints posed “significant challenges” to scaling green investment.