Climate plans failing to quantify impact of decarbonisation measures

Analysis comes as NGO produces overview of all key frameworks and expectations for transition plans

Most big polluters don’t explain how their decarbonisation plans will contribute to reaching net zero, according to new research.

Analysis by software firm Clarity AI has found that only 40% of firms provided “a clear quantification of the impact” of different decarbonisation measures they have pledged to undertake.

The research is based on climate plans and other documents published by more than 300 companies in high-emitting sectors such as Oil & Gas, Utilities and Aerospace & Defence.

It was released the same week that a group convened by the World Benchmarking Alliance unveiled guidance for companies about how they can develop credible climate strategies.

The 78-page report takes the various existing guidelines, frameworks and assessment methodologies for transition plans, and distils them into a single set of expectations for preparers and assessors of the documents.

It describes a company that “does not quantify the GHG emissions reduction resulting from the actions it plans to implement” in its transition plan as a ‘red flag’.

“The description of the decarbonisation levers implemented or planned by the company (e.g. energy or material efficiency and consumption reduction, fuel switching, use of renewable energy, phase out or substitution of product and process…) should include information on their overall expected quantitative contributions to achieving the GHG emissions reduction targets,” it continues.

Clarity AI found that 80% of companies in its study disclosed the decarbonisation measures they planned to use, but only 40% provided quantitative information about the impact of those measures.

Oil & Gas companies were the most likely to omit this information (62%), followed by chemicals firms and carmakers, both at 44%, and utilities at 43%.

“It’s no longer enough to look at companies’ commitments and ambitions regarding carbon reduction targets. Nowadays, investors are eager to understand the credibility of these commitments and want to know whether companies have a realistic and meaningful plan to achieve them,” said Clarity AI’s climate director, Nico Fettes. “This information is often buried in various documents and presented in different forms.”

Clarity AI also looked at the role of more controversial ‘decarbonisation’ measures, such as offsets and negative-emissions technologies, in corporate transition plans. It found that firms in Aerospace & Defence (38%), Trading & Distribution (38%) and Oil & Gas (32%) were the biggest users of the former, while Steel (73%), Oil & Gas (70%) and Trading & Distribution (46%) were the biggest users of the latter.

Note: This article was updated to reflect the fact that World Benchmarking Alliance worked in collaboration with other experts and bodies to develop the report on climate transition plans.