The net-zero transition plans of the UK’s top firms would not meet the government’s definition of ‘credible’.
EY investigated the climate-related commitments and plans of FTSE 100 businesses and found that 95% have not yet publicly disclosed a detailed and actionable transition plan, thus failing to meet the latest recommendations from the Treasury-backed Transition Plan Taskforce. This is despite the government’s COP26 pledge that UK listed companies would be mandated to publish decarbonisation plans by 2023.
Around 80% of listed firms have publicly declared an intention to reach net zero by 2050 or earlier, in line with the government’s legally binding long-term climate target. However, EY found that most are not backing these ambitions up with interim emissions reductions goals, nor plans to change investments or upskill and reskill staff to deliver decarbonisation.
A total of 78% of FTSE 100 companies have published partially developed plans that do not yet address key questions around strategy and execution, while 17% remain in the early stages of plan development. Of the 5% that have disclosed detailed plans, many have work to do to fully align with the taskforce’s guidance, due to gaps in areas such as financial planning, metrics and targets.
“While the government has previously said that listed companies will be expected to publish their transition plans this year, a final date hasn’t been disclosed,” said EY UK and Ireland managing partner Rob Doepel. “By setting a deadline, the government would give much-needed certainty to the UK’s largest businesses and would send a clear message that inaction is not an option.
“Businesses should now be clear about what credible, detailed plans need to look like, and should have a good idea about the direction regulation is moving in.”