Standard Life Investments and the Environment Agency asked Trucost to look at the latest developments in the use of carbon offsetting and carbon neutrality by FTSE companies, in the hope that as the financial materiality of climate change is becoming more and more evident this report will stimulate continued discussion of carbon management by the business and investment community.
The report shows that more companies are seeking carbon neutrality, although these are still a minority. The number of companies that claim to have achieved carbon neutrality or aim to offset their emissions has nearly doubled from 15 to 28 since last year, although this still represents just 5% of 557 FTSE All-Share companies. Offsetting is predominantly a strategy pursued by companies that are not particularly carbon intensive and only 1% of the emissions of the FTSE All-Share were offset last year.
The nature and scope of offsetting varies significantly. Only 11 of the 28 companies aim to be, or currently claim to be, carbon neutral for their entire operations. The remainder have investigated carbon neutrality for part of their operations or offer offsets to their customers. Offsetting standards are developing but there is no universally recognised standard as yet.
The GreenFin Summit follows a successful launch event in 2019. That invitation-only event brought together 100 corporate sustainability leaders, major public-sector pension fund executives and leading financial institutions, with over a trillion dollars of combined assets under management. The discussion broached vital topics in ESG that will be expanded upon at the 2020 Summit. Richard Mattison...