The research, published jointly by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, the Oxford Martin School at the University of Oxford, and the Transition Pathway Initiative, reveals the energy sector’s lack of progress in achieving the goals of the 2015 Paris Agreement almost four years later.
Looking at the public disclosures of 20 coal companies, 62 electricity companies, and 50 oil and gas companies, the research finds that three coal mining companies (BHP Billington, Exxaro Resources, and South32), nine electricity companies (CEZ, EDF, Endesa, Enel, E.On, Iberdrola, National Grid, Ørsted, and XCEL Energy), and one oil and gas producer (Eni), have set a date by which they will reduce the emissions associated with at least one of their core business activities to net zero.
Of these thirteen firms, nine set a date of 2050 to achieve net zero, while four set a date of 2025 or 2030.
The extent of the companies’ commitments also varies. While all thirteen companies committed to achieving net zero direct emissions (those produced directly by the extraction of coal, oil or gas, or generation of electricity), only three pledged to eliminate indirect emissions (such as the emissions produced by generating the electricity used in their processes, or down the line from coal or gas extracted by the company, but burned by other firms).
The research also finds:
- just over half (54%) explicitly acknowledge the aims of the Paris Agreement to pursue efforts to limit global temperature rise to 1.5°C, but just 2 in 5 (39%) stated their support for these aims;
- only 1 in 5 (20%) explicitly acknowledge the need to reach net zero emissions.
Many countries and businesses are committing to reach net zero greenhouse gas emissions before 2050 in order to keep global heating well below 2°C above pre-industrial levels. Scientists last year said that any warming greater than 1.5°C “increases the risk associated with long-lasting or irreversible changes” for the planet, and that global human-caused emissions of carbon dioxide (CO2) need to reach net zero by around 2050. Reaching net zero involves reducing greenhouse gas emissions as much as possible and offsetting residual emissions that can’t be reduced further, such as by planting trees.
Energy supply and use account for around 72% of global greenhouse gas emissions in 2013, according to the Centre for Climate Energy Solutions.
Professor Simon Dietz, Professor of Environmental Policy at the Grantham Research Institute, said:
“Climate science tells us that net carbon dioxide emissions must fall to zero to stabilise global temperatures, and that limiting the temperature increase to 1.5 degrees requires global carbon dioxide emissions to reach net zero around 2050. Although new corporate net zero commitments are being made all the time, our analysis shows that we are starting from a very low base.”
Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, at the University of Oxford, said:
“Four years on from the signing of the Paris Agreement, our findings show that most of the world’s largest energy companies have yet to develop plans compliant with one of its key goals: to eliminate net emissions of carbon dioxide over the next three decades. This exposes investors to significant financial risk as implementation of the Paris Agreement leads to polluting assets becoming stranded.”
Adam Matthews, Co-Chair of Transition Pathway Initiative and Director of Ethics & Engagement at Church of England Pensions Board, said:
“This is important and much needed research that highlights the gap between what is needed to achieve 1.5 degrees and where current commitments from companies are at. While it’s clear that the energy sector is far from where it should be on planning for net zero, the fact that we are beginning to assess these commitments, as well as letting companies know we are scrutinising their approach, will no doubt drive further company responses.”
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NOTES FOR EDITORS
- Data for the research was obtained from companies’ public disclosures, including annual reports, sustainability reports and responses to the CDP questionnaire. The data have been subject to internal quality control, according to which analysts reviewed the company assessments in detail, and overall trends across companies have been looked at with a view to identifying outliers and unusual patterns.
- The research (PDF) looked at the public disclosures of 19 out of 20 of the largest coal mining companies by free float market cap, plus 1 other coal mining company that is listed as a “focus” company by the Climate Action 100+ investor initiative; 59 out of 62 of the largest electricity companies by free float market cap, plus 3 other electricity companies that are listed as focus companies by Climate Action 100+; and 44 out of 50 of the largest oil and gas companies by free float market cap, plus 6 other oil and gas companies that are listed as focus companies by Climate Action 100+.
- Dr. Hans-Otto Portner, co-chair of the Intergovernmental Panel on Climate Change (IPCC) working group on the impacts of climate change said at the publication of the Special Report on Global Warming of 1.5ºC, in October 2018: “Every extra bit of warming matters, especially since warming of 1.5ºC or higher increases the risk associated with long-lasting or irreversible changes, such as the loss of some ecosystems.”
- The Centre for Climate Energy Solutions found in 2017 that energy production of all types accounts for 72% of all emissions in 2013, using the World Resources Institute’s Climate Analysis Indicators Tool. This includes both direct and indirect emissions.
- The Grantham Research Institute on Climate Change and the Environment (http://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (http://www.granthamfoundation.org/).
- The ESRC Centre for Climate Change Economics and Policy (http://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (http://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.
- The Oxford Martin School at the University of Oxford (https://www.oxfordmartin.ox.ac.uk/) is a world-leading centre of pioneering research that addresses global challenges. It invests in research that cuts across disciplines to tackle a wide range of issues such as climate change, disease and inequality. The School supports novel, high risk and multidisciplinary projects that may not fit within conventional funding channels, because breaking boundaries can produce results that could dramatically improve the wellbeing of this and future generations. Underpinning all our research is the need to translate academic excellence into impact – from innovations in science, medicine and technology, through to providing expert advice and policy recommendations.