Green targets cover only a third of UK corporate emissions

Analysts say 'carbon laggards' could fall foul of regulations and miss out on financial opportunities

The UK plans to increase oil and gas production in the North Sea even as it pursues net-zero targets. AFP

Green targets in Britain cover only a third of carbon emissions by companies, a report says.

Analysts said “carbon laggards” could miss out on financial gains from the push towards net zero.

Those UK companies that do take action are decarbonising faster than in Europe or North America.

The report by disclosure group the Carbon Disclosure Project and consultant Bain & Company said companies without climate plans risk falling foul of tightening regulations.

Pressure is increasing on companies to clean up their operations in what is often described as a critical decade in fighting climate change.

Dexter Galvin, CDP’s chief commercial officer, said it was concerning that the majority of UK companies had yet to set targets.

Only 36 per cent of corporate emissions are covered by decarbonisation targets, according to the report.

The figure falls to 31 per cent if emissions further down the supply chain are included.

“Companies can truly embrace decarbonisation and add value to their business – these are not mutually exclusive,” Mr Galvin said.

“The fact is there are nowhere near enough companies taking the necessary steps to do this, even though it is good for business, people and planet.”

The report said companies who “take decarbonisation seriously” had financial opportunities amounting to a 30 per cent advantage over “carbon laggards”.

Britain’s hospitality sector was identified as a cause for optimism, with 12 per cent emissions cuts since companies began reporting to CDP, compared to single figures in Europe and North America. The UK’s fashion sector also outperformed rivals.

“Effective decarbonisation strategies are a win-win – good for the planet and good for the organisations which enact them,” said Katherine Kajzer-Hughes from Bain & Company, who works with UK companies on sustainability.

Slow corporate progress could result in the UK falling further behind its national net zero goals. Ministers have set a target of reducing emissions by 68 per cent by 2030, compared to 1990 levels.

They had fallen 46 per cent by the end of last year, according to a report to parliament. Prime Minister Rishi Sunak recently announced an expansion of North Sea oil and gas drilling.

A worldwide report in June said the number of major companies setting net-zero targets had almost doubled since late 2020, but many lacked the transparency to make them meaningful.

The UN has said global emissions must be almost halved by 2030 to limit the global temperature rise to 1.5°C above pre-industrial levels, the goal of the Paris Agreement.