06 Mar 2024
by Douglas McCauley

Guest Blog: Edenseven explore whether businesses are ignoring the climate crisis

In this guest blog, Douglas McCauley, Sustainability Analyst – edenseven, discusses their findings around the current level of climate reporting by businesses and their progress towards net zero.

edenseven is a sustainability consultancy working in the public and private sectors to help clients achieve quantifiable environmental and financial benefits by designing, improving and running data-driven sustainability strategies.

In late 2023, edenseven released a report titled ‘Are Businesses Ignoring the Climate Crisis’, where they analysed the climate action of FTSE 250 businesses. The FTSE 250 Index is a capitalisation-weighted index consisting of the 101st to the 350th largest companies listed on the London Stock Exchange.

Report background

The research behind edenseven’s FTSE 250 report intended to answer three key questions;

  1. Do businesses understand their carbon impact?
  2. Are businesses committing to net zero?
  3. Are commitments turning into meaningful action?

A business’ carbon emissions can be broken down into three different ‘scopes’. Scope 1 refers to a business’ direct emissions, such as those arising from business-owned vehicles or the combustion of fossil fuels at business facilities. Scope 2 refers to emissions from purchased electricity, heat and steam. Scope 3 refers to indirect emissions, such as from employee commuting and business travel, purchased goods and services, and the use and end-of-life of any products sold.

Report findings

edenseven’s FTSE 250 report uncovered the following key findings:

  • Rising Emissions: FTSE 250 businesses generated at least 129 million tonnes of CO2 equivalent (MtCO2e) emissions in 2022, approximately the annual emissions of 35 coal-fired power plants. These emissions continue to rise, with a 9% emissions increase for 2022 compared with 2021.
  • Poor Emissions Disclosure: One in four of the FTSE 250 businesses failed to disclose scope 1 and 2 emissions and less than half disclosed scope 3 emissions between 2022 and a baseline year.
  • A Lack of Target Setting: Over a third (37%) of FTSE 250 businesses have failed to set a target year for reaching net zero. Only 4% have set Science-Based Targets initiative (SBTi) accredited goals.

What are the implications of this?

These findings are particularly concerning because they suggest that many businesses are unaware of the full extent of their emissions or are not prepared to disclose them. The lack of credible net zero targets highlights limited climate action and perceived urgency of net zero by FTSE 250 businesses.

Scope 3 emissions are notoriously difficult to measure because they lie outside of the reporting business’ direct control. This may partially explain the limited scope 3 disclosures by FTSE 250 businesses. However, scope 3 emissions often account for the majority (>75%) of a business’ carbon footprint. Therefore, it is vital that businesses measure and disclose these emissions.

There are many tools to assist businesses in their paths to net zero. edenseven have developed cero.earth; a market-leading carbon accounting and management platform, which incorporates scopes 1, 2 & 3 emissions, target setting, and reduction project tracking, enabling businesses to have a clear view of their path to net zero emissions.

Businesses must increase their climate action if we are to avoid the worst impacts of climate change.

The full report is available for download from edenseven’s website by following the link:  https://www.edenseven.co.uk/ftse250

Find out more about cero.earth, edenseven’s carbon accounting and management platform by following this link: https://www.edenseven.co.uk/cero-earth
 

 


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Authors

Douglas McCauley

Douglas McCauley

Sustainability Analyst, edenseven ltd