New TPI analysis of the electricity, coal, oil and gas sectors indicates business strategies are failing to keep pace with the need to decarbonise
July 2018
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This week, the TPI published a report looking at the readiness of 105 of the world's largest public companies to transition to a low carbon economy.
The State of Transition in the Coal Mining, Electricity and Oil and Gas Sectors found some companies and sectors making significant improvements in management processes and policies, but that most haven't aligned their business models and strategies to the goals of the Paris Agreement.
The report was released on Monday, 2 July at the Asset Owners’ State of Transition Climate Summit, an event held in partnership with FTSE Russell and the London School of Economics at the London Stock Exchange. The Summit was addressed by the Archbishop of Canterbury, the Most Revd and Rt Hon Justin Welby. You can read his speech here.
We are pleased to also let you know the new TPI website is now live. Incorporating the initiative's new logo and brand identity, it features a user-friendly layout that enables visitors to more easily find the content they are looking for, whilst presenting information in a more visually dynamic and interesting way. Further improvements to the site, and to the usability of the TPI tool itself, are planned in the near future.
Thank you for your continued support for the TPI. Please do not hesitate to contact us if we can be of any assistance.
Adam C.T. Matthews and Faith Ward
Co-Chairs of the Transition Pathway Initiative (TPI)
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TPI report finds business strategies failing to keep pace with the need to decarbonise
The Transition Pathway Initiative, now backed by over £7/$9.3 trillion in assets under management, released its report The State of Transition in the Coal Mining, Electricity and Oil and Gas Sectors earlier this week.
The report analyses 105 of the world’s largest public companies in three key sectors: coal mining, electricity, and oil and gas. It shows significant improvement in companies’ carbon policies and management processes but concludes that most are yet to adopt business strategies that align with the goals of the Paris Agreement.
The report was released on Monday, 2nd July at the Asset Owners’ State of Transition Climate Summit held in partnership with FTSE Russell and the London School of Economics at the London Stock Exchange, where the world’s leading asset owners worked together to identify interventions that asset owners can make to help shape the transition to a low carbon economy.
Key findings include:
- The electricity sector and general mining companies are best prepared in terms of their overall quality of management.
- In contrast, nine pure-play coal companies are stuck on levels 0 and 1 of the management quality assessment.
- Oil and gas companies acknowledge the importance of climate change but most do not have emissions reduction targets.
- There is clear progress across all three sectors, with 17 out of the 54 companies improving since TPI’s previous assessment. Progress is related to implementing new carbon management practices, such as explicitly recognising climate change as a business risk / opportunity, and setting emissions reduction targets.
- Of the 37 electricity utilities assessed, 26 have targets extending to at least 2020, but only 19 have targets encompassing 2030. Of these, over half are projected to be aligned with at least the Paris Pledges in 2020, and most of these also align with a Below 2 Degrees scenario.
- Only 5 of the electricity companies - E.ON, EDF, Enel, Iberdrola and SSE - are aligned with Below 2 Degrees by 2030.
- In the oil and gas and mining sectors, very few companies have set emissions targets reduction targets for the carbon emissions from the use of coal, oil and gas in buildings, electricity generation, industry and transport.
Figure: Management quality of public companies in coal mining, electricity and oil and gas
The full report is linked to immediately below.
A slide presentation from Monday’s event will be uploaded in due course and key takeaways from it shared in a future newsletter.
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New TPI website and brand identity launched
The new brand identity for the TPI was recently launched and can now be seen across the redesigned website, twitter page and communications materials.
The work to strategically evolve the “look, feel and tone” of the TPI brand is designed to strengthen the initiative’s global positioning and profile, and support efforts to better reach and connect with our key audiences. During the work four core positioning values emerged for the TPI:
- Global
- Transparent
- Robust
- Dynamic
The new identity is designed to reflect these values and convey an organisation that is addressing an urgent issue, a catalyst for change and progressive in its approach.
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TPI key facts
- Developed with three key partners:
- Source data provided by FTSE Russell and the LSE
- Secretariat provided by Principles for Responsible Investment (PRI)
- Aligning with TCFD recommendations
- Supported by nearly 30* major asset owners and asset managers globally (£7/$9.3 trillion* combined AUM)
- Sector reports published on autos, cement, coal, electric utilities, paper and steel
- Welcomed by the Head of UNFCCC and UNEP.
(*as of 3 July 2018)
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Research Funding Partners:
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