The majority of the world's publicly traded companies involved in heavy industries are failing to reduce carbon emissions in efforts to limit global warming, warns the institutional investor-backed Transition Pathway Initiative.
Only 16 out of 111 aluminum, cement, diversified mining, steel and paper companies studied in the research are working to reduce carbon emissions in line with the objectives of the 2015 Paris Agreement. The research was carried out for the TPI by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. Ninety investors representing $23 trillion in assets formed the Transition Pathway Initiative to assess companies' preparedness for the transition to a low-carbon economy.
The research highlighted that the worst performers among companies with a combined market capitalization of over $856 billion were in the aluminum and paper sectors. None of the paper companies, one aluminum producer and six steel companies are aligned with the goal to prevent temperature increases to 2 degrees Celsius or below by 2050.
Heavy industry sectors are the most challenged in reducing carbon emissions but they are responsible for more than 9 gigatons of greenhouse gases, said Adam Matthews, co-chairman of TPI and director of ethics and engagement at the £2.8 billion ($3.8 billion) Church of England Pensions Board, London.
"From recycling systems to technological innovations, the solutions are now there, and investors are ready to push for much bolder action from these sectors in the run up to COP26," Mr Matthews said Wednesday in a news release, referring to the United Nations Climate Change Conference next November.
"To ensure that companies are part of the transition decade they must initiate cooperation across sectors and through their value chains to develop circular economy measures such as material efficiency and cross-sector recycling of by-products," Mr. Matthews said.