The importance of Industries’ emission reduction efforts to achieve Paris Agreements’ goals

The Transition Pathway Initiative (TPI) has published a Research about the progresses of industrial companies in their emission reduction goals and their alignment with the pledges of the Paris Agreement.

The TPI analyses 72 companies in Carbon Performance across paper, cement, steel and aluminium sectors; and 100 companies in Management Quality on climate across paper, cement, steel, aluminium and chemicals sectors. These are considered high-emitting industry sectors, and together produce over 2/3 of direct industrial CO2 emissions.

The main conclusions obtained from the report are:

  • Only 19% of the largest publicly listed industrial companies are aligned with a pathway to keep global warming to 2⁰C or below.
  • 29% of companies are set to align their emissions with the Paris Pledges by 2030 – up from 24% in 2018. The number of cement companies aligned with the pledges has more than doubled since 2018.
  • There has been no improvement in the carbon performance of the aluminium or steel sectors, and industry as a whole is moving too slowly to limit warming to 2⁰C or below.

Some other conclusions drawn from the report are listed below:

  • The proportion of companies disclosing their emissions has increased from 61% in 2018 to 76%. Much of this improvement comes from companies listed in Asia (specially China) and Russia.
  • More companies are setting long-term reduction targets. In 2018 only 5 industrial companies had set a 2030 target that was aligned with the Paris Pledges or better. Now 14 companies have done so.
  • Particular improvements are visible in the cement sector – where the number of companies aligned with the Paris Pledges or better has risen from 2 to 5 since 2018; and in paper, where 10 of 18 companies are now aligned with the pledges or better.
    • The steel sector has shown a significant improvement in climate management quality. Its average management quality score has risen from 1.8 in mid-2017, to 2.4 this year. However, it has not improved its Carbon Performance, with only 6 out of 24 companies still aligned with the Paris Pledges.
    • At 3.0, the chemicals sector has the highest average management quality score of all sectors assessed by TPI. Yet the largest chemicals company by market capitalisation, DowDuPont, is only on Level 1.

    Source: UNFCCC External Press Release, available at the following link: https://unfccc.int/news/most-high-emitting-industries-not-aligning-with-paris-goals

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