Just 1 in 10 European companies have emission targets in line with the Paris Climate Agreement, according to a new report published by global non-profit CDP Europe.
According to the report, 95% of all corporate lending in Europe comes from banks with Paris-aligned climate ambitions, however, this funding is going directly to companies who do not have the same ambitions.
This means that the banks are unwittingly funding the climate crisis.
The research, which is based on nearly 1,000 European companies worth around 80% of Europe’s market value, revealed that there is an estimated €4 trillion mismatch between bank lending that aims to be ‘Paris-aligned’ and the market for this corporate lending in Europe.
The data does show that there is momentum behind better target-setting among companies, with 56% of companies now having a transition plan in place.
However wide differences still exist. For example, in the steel and electric utilities sectors, the best companies are up to 4 times as carbon-efficient as the lowest-performing. And just 35% of companies in the highest-impact industries are so-far disclosing data on their most important emissions.
Overall, Europe’s corporate sector is on track for 2.7 °C of global warming by the end of the century – with countries ranging from 2.3°C (Switzerland) to 3.0°C (United Kingdom, Belgium, Italy).
Maxfield Weiss, executive director at CDP Europe, said: ‘The European corporate sector is running hot.
‘Based on current ambition, it’s on a 2.7°C path of warming – over a degree more than climate science says we need to achieve to prevent climate change’s most catastrophic impacts.
‘That leading corporates across many sectors are now setting ambitious targets and delivering emissions reductions is positive, and shows rapid decarbonization is doable. But with less than 1 in 10 companies having ambitious enough targets, our new data shows we need far more action from corporates and financial institutions to make good on our goals.
‘Banks and investors have their own big ambitions: now we need them to engage companies more to raise the level of disclosure and action so we accelerate Europe’s path to Paris and to deliver the European Green Deal.’
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