Australia’s largest listed companies are not doing enough to help limit global warming to 1.5C by 2050 according to research released last week by the Australian Council of Superannuation Investors (ACSI).
Corporate Australia’s current commitments will see a 36 per cent overspend of the ASX 200’s ‘carbon budget’ as concrete and measurable short and medium-term emission reduction targets are missing, hindering investors’ ability to assess and understand how companies intend to meet their ambitions.
“While we welcome the growing number of net zero ambitions from the ASX 200, ambitions must be made more credible by accounting for all emissions and implementing measurable short and medium-term reduction targets,” said Lousie Davidson, ACSI chief executive.
“If we are to meet the 1.5C target, companies cannot leave cutting emissions to the eve of 2050.”
The ACSI report comes as the UN Environment Program warned there was no credible pathway to preventing temperatures rising 1.5C above pre-industrial levels despite binding commitments in the Paris Agreement.
Targets not aligned
Working with the Climateworks Centre, the research found the net-zero and emission targets of 187 companies in the ASX 200 were largely not in line with a 1.5C trajectory with only nine per cent of companies deemed to have 1.5C-aligned targets.
The research showed a miniscule three per cent of companies assessed had a net zero commitment in addition to an emissions reduction target for Scope 1, 2 and if applicable, Scope 3 emissions. A mere one per cent of companies had set these targets in line with 1.5C and nearly half did not set any absolute emissions reduction targets.
“While further climate change is inevitable, decisions made in the next months and years will determine its rate and magnitude. This trajectory, good or bad, will be largely dependent on the pathways adopted now,” Davidson said.