The NGO CDP, formerly known as the Carbon Disclosure Project, has just launched an appeal to the biggest corporate polluters. The appeal, signed by over 300 financial institutions, most of which are financial institutions, aims to encourage companies to adopt carbon emission reduction targets compatible with the Paris Climate Agreement.
Large G7 companies fail to comply with the Paris Agreement
The NGO CDP, created in 2000, offers companies, cities, states and regions around the world the possibility of measuring their environmental impact in 3 areas:
- climate change
- water safety
- deforestation
The aim is both to encourage these organizations to take concrete steps to reduce their impact, and to provide transparent information to investors, buyers and other stakeholders in urban projects.
In its latest report on large companies in the G7 countries - Canada, Germany, France, the USA, Italy, Japan and the UK - the NGO CDP makes an alarming observation: if the greenhouse gas emission reduction targets set by the various large companies in these countries are anything to go by, no G7 member state has a business sector capable of meeting the Paris Agreement target of limiting global warming to +1.5°C.
According to the CDP, the current targets of major companies in the G7 countries range from +2.2°C (Germany and Italy) to +3.1°C (Canada). Between these two extremes lie the USA and Japan (+2.8°C), the UK (+2.6°C) and France (+2.3°C).
As the CDP reminds us in its report published in September, " it is essential to respect the Paris limit ". According to the IPCC, among the many likely consequences, global warming at +2°C instead of +1.5°C would expose 2.6 times more people to " extreme and potentially dangerous heat events ".
📢New Report: the CDP Science-Based Targets campaign is driving high-impact companies to set 1.5 °C targets at scale. Read our progress report: https://t.co/kVkE8RiTjn #capitalmarkets pic.twitter.com/Fx3Sjv1NV4
- CDP (@CDP) October 25, 2022
Carbon footprint: 1,000 companies called on to adopt scientifically validated targets
The NGO CDP is therefore launching a new appeal to encourage "high-impact" companies, both in terms of carbon emissions and market capitalization, to adopt scientifically validated CO2 emissions reduction targets ("Science Based Targets"), compatible with the +1.5°C warming limit set by the Paris Agreement.
The appeal was signed by 318 financial institutions and multinationals, whose annual procurement assets and expenditure total $37,000 billion.
Financial players include the European Investment Bank, Allianz Global Investors, Crédit Agricole, Banque Postale, Axa Group, Nomura Asset Management and UBS. 45 multinationals have also signed the appeal, including Yamaha, Schneider Electric, PepsiCo and pharmaceutical group AstraZeneca.
1,000 companies are among those targeted by the CDP appeal, including FedEx, Wilmar International, Wal Mart de Mexico, General Electric, Caterpillar, Qantas, JD.com and BASF. 48% of targeted companies are based in the Asia-Pacific region, and 23% in the USA. Only 1 company in 10 is European.
Science Based Targets: essential tools aligned with the Paris Agreement
These 1,000 companies have such a huge environmental impact that they must join the effort to meet the +1.5°C target set by the Paris Agreement. Every year, they emit as much greenhouse gas as the United States and India combined.
According to Laurent Babikian, Global Director of Capital Markets for the NGO CDP, " the situation will get catastrophically worse if we don't see an unprecedented reduction in GHG emissions - 50% over the next eight years - to enable us to cap the rise at 1.5°C ". To achieve this, " the companies with the greatest impact " must have " ambitious targets to reduce all their emissions in the value chain ", he stresses.
SBTs (Science Based Targets) are indispensable tools. As Dr. Luiz Fernando do Amaral, CEO of the Science Based Targets initiative, reminds us, " by establishing a science-based carbon neutrality target, business leaders can be confident that their climate change mitigation activities are consistent with 1.5°C in the short term and carbon neutrality in the long term."
It is therefore essential for the climate that these 1,000 companies, which represent 44% of the MSCI All Country World stock market index, adopt scientifically validated targets.