Less than half of world’s listed firms have set carbon reduction targets, with only 1 in 6 aligned with global ambition, MSCI says
- While the ratio of firms that have set decarbonisation goals has risen to 44 per cent from 36, only 17 per cent of their objectives align with global climate ambitions
- Significant gap remains between listed firms’ climate commitments and their carbon emissions according to MSCI’s Net-Zero Tracker, says analyst Sylvain Vanston
The proportion of companies that have set decarbonisation targets has risen slightly over the past five months, but there has been hardly any improvement in their goals that align with global climate ambitions, according to index provider MSCI.
While some 44 per cent of publicly listed companies have set decarbonisation targets as of March, only 17 per cent of their objectives align with global climate ambitions, compared with 36 per cent and 16 per cent, respectively, in October, it said in a report on Monday, showing the need for quicker adoption of tougher targets and greater efforts to achieve them.
This is because listed companies are on track to deplete their “emissions budget” for limiting global warming to 1.5 degrees Celsius above pre-industrial levels by October 2026, two months earlier than its estimate last October, the report said.
The projection is based on the emissions and reduction targets of the 9,144 constituents of the MSCI All Country World Investable Market Index covering 23 developed markets and 27 emerging market countries.
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“We are seeing greater progress from public companies towards achieving essential climate goals, but the MSCI Net-Zero Tracker reveals that a significant gap remains between their climate commitments and their carbon emissions,” said Sylvain Vanston, the executive director for climate investment research at MSCI.
