With the momentous COP26 talks coming to a close, one of the main points of discussion is how we are going to work together to deliver the global net zero by mid century and keep 1.5 degrees within reach. In order to do so, realistic plans are required.
The recent Boardroom Bellwether report surveyed the secretaries of the FTSE 350 to investigate how companies are responding to the business and governance environment.
Well over half (67%) of those who took part in the research believe that overall risk is increasing with 28% of boards considering climate change as the major factor.
In light of this, there is increasing pressure for companies to address Environmental, Social and Governance (ESG) issues and, more importantly, to put in place strategies to mitigate the adverse consequences of pressing challenges such as climate change. However, how many companies are actually doing this?
Which companies have made plans to address climate change?
There is no doubt that awareness surrounding climate change has grown, with 96% of FTSE 350 companies having discussed climate change at least once in the last year.
Despite this, only 69% of these FTSE 350 have actually published plans to tackle climate change. Interestingly, the majority (62%) of those that have published plans are FTSE 100 companies whilst 39% are FTSE 250 companies.
Of those that have not got any plan in place, 80% are FTSE 250 companies and 20% are FTSE 100 companies.
What time scales are the plans focused on?
The urgency of different companies’ plans varies. The survey found that 39% of FTSE 350 companies had plans that focused on a five to 10 year time span whilst 25% only covered the next five years.
Almost a fifth (19%) of respondents have put in place strategies that endure more than 15 years and 17% cover a period of between 10 and 15 years.
An ambition to be net zero
A company going net zero involves them balancing the amount of greenhouse gas emissions they produce and the amount they remove from the atmosphere.
The research undertaken in the Boardroom Bellwether report found that 57% of FTSE 350 companies are aiming to become net zero. Of those aiming to become carbon neutral, 60% are from the FTSE 100 and 39% are from the FTSE 250.
Overall, 39% of respondents have not yet announced an ambition to be net zero but the hope is that more will do so in the near future.
ESG-specific events
Despite the increasing investor awareness of ESG issues such as climate change, only 16% of those surveyed hold an ESG investor day; 82% do not yet hold such events.
Although surprising, this statistic does demonstrate the potential scope for more companies holding ESG investor days, particularly since the majority will have been hindered by the global pandemic.
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