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<\/p>\nThe effects of climate change are intensifying but businesses globally are struggling to make transition plans that they can implement in the real world, according to a report released Wednesday by the London School of Economics and Political Science.<\/p>\n
The study of corporate climate performance looks at disclosures from 2,000 publicly traded companies, which together represent three-quarters of publicly listed equities worldwide and $87 trillion of market capitalization. The authors find that only 2% have disclosed plans to shift capital away from high-carbon assets or to align their spending with their long-term decarbonization goals.<\/p>\n
Recognition of climate change is far more common than not among the companies included. More than 95% have a policy commitment to act on climate. But only about 10% received the authors\u2019 highest score for management quality, indicating that a company has begun to strategically integrate climate change into its business. And 22% failed on one or more of the following tests: to establish a climate policy, disclose operational emissions or set an emissions target.<\/p>\n
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Corporations are expected to play a large role in decarbonizing the economy, but results so far have been lackluster. Some regions have disclosure requirements for emissions and transition plans, and greater regulatory scrutiny in Europe is pushing companies to do more. But the report shows that a majority of their plans aren\u2019t credible. This is for multiple reasons. Many companies aren\u2019t putting enough capital towards decarbonization, and some rely too much on unproven technologies, according to the report. About a third don\u2019t disclose material scope 3 emissions, which measure the carbon impact of their supply chains.<\/p>\n
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