Climate Action 100 benchmark: too much carrot, not enough stick for the biggest polluters

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the Climate Action 100+ Net Zero Company Benchmark, published today.

Key findings from the latest iteration of the benchmark include:

• While 69% of the focus companies have committed to net zero emissions by 2050 or sooner, just 17% of companies have medium-term targets aligned with a 1.5C pathway
• Only 5% of focus companies have committed to align their capital expenditure with their emissions reduction targets
• Just 42% of focus companies have set emissions reduction targets that include their Scope 3 emissions

Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:

“The vast majority of the world's largest emitting companies are not responding to the urgency of climate change by setting Paris-aligned targets, or aligning their capital expenditure to ensure a safe level of warming.

“In the fifth year of the Climate Action 100+ initiative, investors have failed to lay out what the consequences will be for companies that fail to improve.

“Investors have spent too much time offering the carrot, and not enough threatening the stick in order to change company behaviour.

"Investors must be prepared to escalate their engagement, by filing or supporting shareholder resolutions, or voting against the re-election of directors.

“Investors should take the opportunity this AGM season to vote against climate plans that are misaligned with the Paris Agreement, including Glencore and Woodside.

"Investors should oppose the re-election of Peter Coates at Glencore, Peter Hearl at Santos and Anne Pickard at Woodside, the respective Chairs of each company's board sustainability committee.

“Glencore's satisfaction of all indicators on climate policy engagement is a sick joke. According to InfluenceMap, Glencore is the 8th most obstructive company on climate and energy policy in the world.

"Glencore continues to oppose ambitious climate policy in Australia through direct advocacy and its membership of industry associations like the NSW Minerals Council and the Queensland Resources Council.”

Background

Key observations on the 15 Australian companies included in the benchmark:

• Of the 15 companies, only Boral has a medium term (to 2035) emissions reduction target that satisfies the indicator by covering scope 1, 2 and material scope 3 emissions. In September 2021 Boral announced significantly enhanced emissions reduction targets and a commitment to obtaining accreditation via the Science Based Targets initiative.
• 14 companies didn’t satisfy any criteria on the capital allocation indicator, with only Rio Tinto seeing improvement with a Partial score. This is a material concern since allocation of capital is one true measure for how companies are prioritising decarbonisation.
• 60% of Australian companies (9 of 15) don’t have decarbonisation strategies in place to meet emissions targets. Importantly, even those companies that score well, this indicator is not a comment on the Paris-alignment of the targets of the appropriateness of the strategy.
• A new Net Zero Analysis indicator for oil and gas companies verifies that Woodside, Santos and Origin all are materially exposed to transition risks in a pathway that is consistent with the International Energy Agency’s Net Zero Scenario.