According to a study published last week by the Australian Council of Superannuation Investors (ACSI), Australia’s largest listed companies are not doing enough to help limit global warming to 1.5°C by 2050.
Current commitments by Australian companies will cause the ASX 200 ‘carbon budget’ to be overshot by 36%, as concrete and measurable short- and medium-term emission reduction targets are lacking, hampering investors’ ability to assess and to understand how companies intend to achieve their ambitions.
“While we welcome the growing number of ASX 200 net zero ambitions, the ambitions must be made more credible by accounting for all emissions and implementing measurable reduction targets in the short to medium term,” said Lousie Davidson, Executive Director of ACSI.
“If we want to meet the 1.5°C target, companies cannot leave reducing emissions until the eve of 2050.”
The ACSI report comes as the UN Environment Program has warned there is no credible pathway to prevent temperatures from rising 1.5C above pre-industrial levels despite binding pledges of the Paris Agreement.
In collaboration with the Climateworks Centre, the research found that the net zero and emissions targets of 187 ASX 200 companies were largely not in line with a 1.5C trajectory, with only 9% of companies considered to have 1.5C aligned goals.
The research showed that a miniscule three percent of assessed companies had a net zero commitment in addition to an emissions reduction target for scope 1, 2 and, where applicable, scope 3 emissions. Barely 1 % of companies had set these targets in line with 1.5°C and almost half had set no absolute emission reduction targets.
“While further climate change is inevitable, decisions made over the coming months and years will determine its pace and magnitude. This trajectory, good or bad, will largely depend on the paths taken now,” Davidson said.