UK companies must come clean on carbon

Posted: 15 November 2005

Companies in the UK FTSE 100 list are saying they are committed to fighting climate change but are failing to take real action, according to a new report released today by the Carbon Trust.

The report warns that companies need to report openly their success in reducing carbon emissions if they are to meet the increasing demands of shareholders and consumers.

The overwhelming majority - 82 per cent - of companies are now openly reporting estimates of their direct and indirect carbon emissions. However, half of the FTSE 100 companies are still not making public commitments to reducing their carbon emissions.

Businesses claimed that the fear of being publicly criticised by the media for failing to meet targets was the greatest barrier to actually setting them. Other reasons cited included differing levels of enthusiasm amongst various subsidiaries and divisions within a company, and a perceived lack of responsibility for cutting carbon in low impact sectors.

Shareholder pressure

When asked about the motivation for taking action, businesses mentioned consumer and shareholder pressure and a personal commitment from a specific individual within an organisation. Legislation was another key driver for those companies that conduct their operations in countries outside the UK.

Dr Garry Felgate, Director of Delivery and External Relations at the Carbon Trust commented: "Openly stating your emissions performance is vital for companies taking the issue of climate change seriously and it's good to see that this is now accepted behaviour amongst most of the FTSE 100. However, it is not just about reporting what you do - it's about making a real difference. That means setting targets and being publicly accountable for achieving those targets.

"Business can benefit from taking action. Climate change is now a mainstream issue and consumers and shareholders alike are becoming more aware of a company's environmental record and this trend is only going to grow. Increased awareness will result in changes to investment decisions and purchasing behaviour, which will be particularly important for sectors where brand recognition is important. Businesses that have taken action are benefiting already, but there is still some way to go for the business community."

Setting targets

Other findings of the study include:

  • 95 per cent of the companies responsible for emissions resulting from their direct operations, such as oil, gas, chemicals, metal, beverages, pharmaceuticals, mining and electricity release regular reports of their carbon reduction progress.

  • The leading sectors in setting targets for future reduction of their emissions are the chemicals, transport, food and drink, finance, tobacco, pharmaceuticals, household products and media industries.

  • A handful of companies claim to have targets but the research found no publicly available evidence to support these claims.

The Carbon Trust an independent company set up by Government to help the UK meet its climate change obligations. For more informaton on the Trust visit www.carbontrust.co.uk