There is a growing carbon gap between the emissions trends of the largest US companies and the cuts needed to reverse emissions outputs, according to a new report from the Carbon Disclosure Project (CDP).
CDP analysed data from its annual information collection from S&P 100 companies for the years 2007 to 2009, and found that greenhouse gas emissions will, at their current trajectory, produce a 3.66% absolute increase in emissions by 2020, relative to 2009 levels.
This figure is far off the 1.05% reduction level per annum which CDP calculates is required to reach President Obama’s US 2020 target for reducing carbon dioxide emissions. While some sectors have reduced their emissions over the past three years, total emissions reported to CDP from S&P 100 companies increased at a rate of 0.36% and as the economy recovers, growth in absolute emissions is likely to increase further.
The four heaviest emitting sectors, Utilities, Energy, Materials and Industrials account for 90% of emissions and the performance of companies within these sectors is of key importance in delivering the reductions of 17% by 2020 required to meet the US target. The Materials and Energy sectors have shown an average decrease in emissions over the last three years of 0.77% and 1.01% respectively. However, Utilities, which accounts for 37% of reported emissions, has experienced an annual growth in emissions of 1.64% and Industrials leads this trend with a larger annual increase of 2.03%.
To meet the Intergovernmental Panel on Climate Change (IPCC) recommended 80% reduction by 2050, the recommended average annual reduction is 3.9%, calculated by CDP. In November 2009, President Obama committed to a 17% absolute reduction in emissions by 2020, measured against a 2005 baseline. This target does not go as far as IPCC recommendations, and is not yet legally binding. However, the corporate sector’s role in delivering against these targets is vital.
“Some corporations are moving in the right direction, with the Energy sector decreasing average absolute reported emissions at a rate close to the US annual target. However, the Industrials and Utilities sectors which are responsible for a high proportion of emissions are still reporting rising emissions. Much greater commitment is needed to meet President Obama’s targets, and certainly those of the IPCC,” Paul Dickinson, CEO of CDP, said.
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