The Science Based Targets initiative (SBTi) has published a report on the collective temperature ratings of companies in Group of Seven (G7) countries, compared with internationally agreed climate goals. The report was developed by the UN Global Compact and CDP, and released ahead of the 2021 G7 Summit in Cornwall, UK.

The G7 consists of Canada, France, Germany, Italy, Japan, the UK, and the US. The economies of the G7 countries cover approximately 40% of the global economy, and 25% of global greenhouse gas (GHG) emissions, the authors report.

G7 market indexes are on temperature pathways towards a rise of 2.95 degrees Celsius. 

The publication, titled ‘Taking the Temperature: Assessing and scaling up climate ambition in the G7 business sector,’ explains that to secure the limit of 1.5 degrees Celsius temperature rise set out in the Paris Agreement on climate change, GHG emissions must be reduced by half by 2030 and reach net zero by 2050. The analysis indicates that the G7 countries’ private sectors are not currently aligned with these goals. Instead, the G7 market indexes are on temperature pathways of 2.95 degrees Celsius or higher – “far from aligning with the climate goals set in Paris,” the report indicates. The temperature rating of each country’s indexes is based on emissions-reduction target data submitted by companies to CDP and the SBTi.

The publication also details which sectors contribute most to emissions on each country’s index. Canada’s SP/TSX 60 is the index most dominated by fossil fuels, which also play a big role in France’s CAC 40 and Italy’s FTSE MIB. In the US, the S&P 500 is more varied, but dominated by emissions from fossil fuels, followed by manufacturing, which is also a significant source of emissions on Japan’s Nikkei 225, Germany’s DAX 30, and the UK’s FTSE 100.

Highlighting that fossil fuel dependency continues to impede a 1.5C future, the authors note that their findings echo the recent report from the International Energy Agency (IEA) calling for immediately stopping all new oil, methane gas, and coal exploration projects and investments.

Among the urgent priorities for climate action, the report calls on corporations to decarbonize their supply chains, and on both investors and financial institutions to set science-based targets for bonds, standards, and portfolios. It also says that businesses and governments must address “the negative corporate lobbying holding back ambition and slowing down the transformation to a fossil-free world.” [UN News] [Publication: Taking the Temperature: Assessing and scaling up climate ambition in the G7 business sector]