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Planet to warm by 3°C if large companies continue emitting GHGs at current rate

Published July 12, 2022

If listed companies continue to emit greenhouse gases at the current rate, the planet will warm by 2.9°C above preindustrial levels, a report has predicted.

Research published by MSCI in its quarterly Net-Zero Tracker shows listed companies are on track to put nearly 10.8 billion tons (gigatons) of direct Scope 1 greenhouse gas emissions into the atmosphere this year. This up about 0.7% from last year, but down 5.6% from pre-pandemic levels.

The research shows the majority (54%) of listed companies have yet to align with a 2°C degree temperature rise, the level necessary to prevent the worst impacts of climate change.

Nearly half (46%) of listed companies are on track to meet the 2°C rise, the research found. The Paris Agreement stipulated this level as the upper boundary for warming, beyond which the impacts on health, food security, water supply, natural ecosystems and economic growth are predicted to become more severe.

The Paris Agreement encouraged companies to adopt a 1.5°C temperature target. The MSCI research shows that only 11% of listed companies are on target to meet this, up slightly from 10% of companies in October 2021. Meanwhile, 32% of companies are on track to drive temperatures up by as much as 3°C and 22% could see that figure rise above 3%.

Though the energy, materials and utilities industries are the biggest emitters of greenhouse gases, other sectors are similarly misaligned with global temperature goals. The food and beverage industry, for example, aligns with a 2.7°C temperature rise. Both the consumer durables and apparel industry and the semiconductor industry align with a temperature rise of 2.4°C.

The Net Zero Tracker estimates listed companies will burn through their share of the global carbon budget for keeping temperature rise below 1.5°C by February 2027.

The report concludes: “The findings in this report underscore the importance of mandatory climate disclosures that would equip investors with the data they need to separate climate leaders from laggards and assess which companies may be most likely to thrive in a net-zero economy. They also highlight how the global effort to standardize climate transition data holds the potential to help investors and policymakers incentivize action to reduce our reliance on fossil fuels and catalyse the massive investment needed to bring a sustainable energy economy to scale.”