As much as 41% of FTSE 250 companies “are not responding quickly enough to the warnings about the impact of climate change” and have still not set or declared a net zero target date, according to the latest report from management consultancy, edenseven.
According to the report – Are businesses ignoring the climate crisis? – the FTSE250 generates equivalent to over half (53.8%) of the UK’s total emissions and represents a key benchmark for evaluating the UK’s response to the climate crisis challenge. However, only 14% of the FTSE250 have Science-Based Targets initiative (SBTi) accreditation, with the average net zero target date now delayed to December 2044 – 13 months later than last year. The report concluded this reflects “a lack of credible and actionable emission reduction plans”.
Pete Nisbet, managing partner at edenseven, said: “The findings of this latest report are concerning and the response from some of these FTSE 250 companies has been alarmingly poor. The reality is, every company, whatever their business, whatever their size, needs to be working towards net zero. The FTSE 250 has the potential to lead the UK towards a sustainable future, and it is critical that these businesses take decisive action now.
“Managing emissions offers advantages in competitiveness, compliance and credibility. Proactively reducing emissions can cut costs through energy efficiency and waste reduction, while investments in clean technologies lower long-term cost exposure and risk. Stakeholders also place increasing value on those prioritising sustainability and social responsibility, and so it’s crucial for reputation too.”
Emissions increasing
Of particular concern is the report of emissions increasing. The FTSE 250’s Scope 1, 2, and 3 emissions have increased to 206.4 million tons of CO2e, a 7% increase in like-for-like emissions compared to the previous year. As this is in line with a 9% increase in revenue, it reflects how businesses are not decarbonising quickly enough to offset their revenue growth and are failing to integrate all-important climate considerations into their growth strategies.
The report also highlighted a decline in transparency reporting, with 20% of businesses failing to report any Scope 3 emissions at all. These are the indirect emissions from a company’s value chain, which form the largest component, accounting for 86% of a company’s total carbon footprint.
Global energy transition expert, Graeme Cooper, also urged more commitment from the FTSE 250: “I would expect to be seeing real leadership from the FTSE 250 by now, but as this report suggests they don’t seem to be moving at a quick enough pace to achieve their own, let alone the country’s, targets.
“There are great examples out there where, rather than focusing on reporting, companies are incorporating environmental impact into their short term and leadership targets, and it’s those companies that see the benefits of improved efficiency and reduced running costs. We need to move from warm words to demonstrable action, embed environment targets to individuals’ performance metrics, and change the narrative by showing the benefits achieved through good data and processes and their effect on the bottom line.”
