Top 7 FTSE companies that have declared robust climate goals

Highlights

  • According to a recent report, 81% of the listed companies don’t have a robust plan for Net Zero target.
  • Only 19% of employees think their employer implements sustainability plan efficiently and only 2% businesses have a long-term emissions reduction target lined up with eliminating global warming to 1.5°C.
  • But as compared to Euro STOXX 50 and DOW 30, the FTSE 100 is doing better with 66% commitments.

A recent report on climate reporting has stated that UK companies are far from being serious in terms of Net Zero targets set by the Boris Johnson government.      According to EcoAct’s annual analysis of climate reporting, only four in ten companies declared that they are in line to comply with the UK’s climate change targets and according to new data staffs are unsure about what their employers are achieving.   

Three quarters of businesses said that they had “one foot in and one foot out” on sustainability, according to the data released by Microsoft and Goldsmiths, University of London. This all came into light despite the big commitments made by many businesses to make sure that they will reduce their contribution to global warming within the next 30 years, if not sooner.

Recently, EcoAct released The Climate Reporting Performance of the FTSE 100, DOW 30 and Euro STOXX 50, which ranked the top 20 businesses. It reported that only 17% of employees think their workplace is as environmentally friendly as their own homes and around 19% think their employer implements sustainability plan efficiently, despite UK have some of the worst insulated homes in Europe. Further, only 2% businesses have a long-term emissions reduction target lined up with eliminating global warming to 1.5°C. Around 81% of the listed businesses don’t have a robust climate plan.   

As compared to Euro STOXX 50 and DOW 30, where 64% and 63% have committed to net zero respectively, the FTSE 100 is doing better with 66% commitments.  Further, more science-based targets (SBTs) are in line with a well below 2⁰C or 1.5⁰C scenario, to 51% this year from 20% in 2020. Around 80% of the companies in the indices demonstrated alignment with the taskforce on Climate-related Financial Disclosure (TCFD) recommendations.   

The report highlighted the need for clean government policy to support and incentivize long-term emissions reductions to 1.5⁰C and importance of COP26 to agree the target of net zero.

Also read: 3 stocks that contributed the most in taking FTSE 100 to 20-month high

Recently, London Stock Exchange became the first exchange to launch a Climate Transition Offering that provides London-quoted businesses with guidance on integrating climate opportunities and risks, based on the UN Sustainable Stock Exchanges Model Guidance on Climate Disclosure.

Earlier, almost one in three largest businesses in the UK pledged to reduce their contribution to carbon emissions by 2050 and over 70 of the FTSE 100 businesses signed the United Nation’s Race to Zero campaign, with many opting to go even faster.

Across the world, over 2,000 companies have signed the UNFCCC Race to Zero. With the upcoming UN Climate Summit COP26, the UK Government is urging more and more firms to work in this direction and set out clear pathways to get to Net Zero.  

The top performers across all indices globally this year are Vodafone, Microsoft, Schneider Electric, Apple and Landsec, and industries such as Biopharmaceuticals and Information, technology, and telecommunications (ITT) stood out this year, replacing banking and Utilities.

Also read: Sainsbury (SBRY) & Tesco (TSCO): 2 climate concerned stocks to buy

Let us take the look at the seven FTSE 100 listed stocks that have signed up to Race to Zero campaign:

AstraZeneca is a global biopharmaceutical firm. The company has committed to achieve zero carbon emission by 2025 and become carbon negative across its supply chain by 2030 by doubling its energy productivity through 100% renewable energy and sustainable product design.

The shares of AstraZeneca Plc are trading at GBX 9,003 in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 11.46% to shareholders in the last one year, and the market cap is £139,468.70 million.

The Vodafone Group Plc is a multinational telecommunication major. It has committed to reduce its own carbon emission to zero by 2030, before reducing its supply chain emissions by 2040.

The shares of Vodafone Group Plc are trading at GBX 112.98, up by 0.37% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 2.92% to shareholders in the last one year, and the market cap is £30,884.71 million.

Rolls-Royce Holdings Plc is one of the leading gas turbine and aircraft engine manufacturers. It has committed to net zero greenhouse gas emissions associated with its business by 2030. This include establishing a circular economy approach to their manufacturing process, which means around 95% of its jet engines can be recycled.

The shares of Rolls-Royce are trading at GBX 134.48, down by 0.36% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 73.29% to shareholders in the last one year, and the market cap is £11,292.91 million.

Unilever Plc is one of the leading fast-moving consumer goods companies. It aims to reduce direct greenhouse gas emissions from its operations and achieve net zero emission from its products by 2039. The company will invest €1 billion in its Climate & Nature Fund over the next ten years to take effective action on climate change and carbon emissions. 

The shares of Unilever Plc are trading at GBX 3,924, up by 0.15% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of -15.51% to shareholders in the last one year, and the market cap is £100,939.23 million.

J Sainsbury Plc operates chains of stores and supermarkets in UK. It has committed investment of £1 billion over the next 20 years to become net zero by 2040 and to reduce plastic packaging, food waste and water usage as well as increase biodiversity, recycling and healthy and sustainable eating.  

The shares of Sainsbury Plc are trading at GBX 302.50, up by 0.37% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 45.86% to shareholders in the last one year, and the market cap is £7,029.87 million.

BT Group Plc is a fixed-line telecommunication company.  The company has completed the switch to 100% renewable electricity worldwide by meeting its target for 2021 and it aim to transition its fleet to electric or zero emissions models by 2030.

The shares of BT Group Plc are trading at GBX 141.05, down by 1.54% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 33.05% to shareholders in the last one year, and the market cap is £14,209.04 million.

Aviva Plc offers retirement, international savings and insurance product and services. It was the first major insurer globally to target Net zero carbon by 2040 and committed to invest £2.5 billion in renewable energy infrastructure and power and low carbon with 100% renewable electricity.

The shares of AVIVA Plc are trading at GBX 397.30, down by 0.48% in the early hours of trade at 8:00 AM on Monday 27 October 2021. The shares of the company gave a return of 43.58% to shareholders in the last one year, and the market cap is £15,336.43 million.

Also read: Impact of climate change policies on housing market

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