AI climate reporting leaves nowhere to hide corporate net zero failures
A new report shows less than one-in-five companies trading on the FTSE100 are on track to meet climate targets.
The analysis, conducted with artificial intelligence, paints a damning picture of the UK’s largest businesses. Assessing corporate public announcements, set targets and sentiment from the last ten years, including net zero, carbon neutrality, and emissions scopes 1 to 3, Permutable AI used large language models to understand whether goals were likely to be met.
Shockingly, more than half of the firms in the study had no publicly available data on net zero targets whatsoever. Of those that do make reporting open, 34 are expected to fail on at least one of their targets according to the modelling.
Only half of the firms had signed up to the Science Based Tartgets initiative (SBTi), which is increasingly viewed as the only viable and reliable way to ensure actions have climate positive impact. This is in comparison with environment, social and governance practices (ESG), whereby companies and bodies establish their own climate-related frameworks to show action is being taken. Critics argue this can be manipulated and does not guarantee adherence to guidance from international organisations such as the United Nations Environment Programme.
Permutable AI’s results are a cause for concern, as steps taken by major corporations to reduce environmental impact are seen as essential to trigger action among smaller businesses. Meanwhile, there is a fine line between publicising policies that suggest increasing environmental responsibility, failure to stick to these or meet goals, and so-called greenwashing. However, as Environmental Journal has reported several times in recent months, AI’s role as a highly effective and efficient tool with which to identify and expose corporate negligence and apathy towards climate action is now widely understood. Simply put, it’s becoming much harder to hide failures in net zero and other areas.
‘AI is going through another global boom right now. While some people are concerned about the negative impact, our data proves that it really can be a powerful tool for good; one that will be integral in helping us to navigate the climate emergency.We know that in today’s sustainable investment market, ESG and green claims are under increasing and immense scrutiny from institutional investors, regulators and customers, and companies need evidence to support their claims,’ Wilson Chan, CEO and founder of Permutable AI. ‘Our AI language models have been trained to recognise patterns and spot anomalies within an organisation’s communications around its green initiatives and it’s clear that a significant number of the FTSE100 are either not doing enough, are failing to set verified SBTi targets, or are misleading the public about the steps that they are taking.’
‘This report shows the importance of closely examining the data behind climate claims. When corporates make misleading statements about their climate strategies and targets, the risks have dramatically risen in recent months. Two sets of regulators are looking into this, consumer and financial ones. ‘Quite rightly, climate and environmental statements have to be backed up with evidence,’ said John Willis, Director of Research and Planet Tracker, commenting on the study. ‘This AI analysis suggests that many UK organisations should be thinking hard about making net zero commitments based on their present publicly available data. Furthermore, if this is the case, investors owning them in sustainable funds may also be at risk of greenwashing.’
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