For the first time, data has shown a decoupling between revenue growth and greenhouse gas (GHG) emissions output among the world’s 500 largest businesses (Global 500), according to a Thompson Reuters report released today. While as a group the companies are not yet reducing their emissions at a rate that follows the global scientific consensus on the risks of climate change, the slight improvement over the past five years offers a glimmer of hope.
The Global 500 currently represents about 28 percent of the world’s Global Domestic Product (GDP) and collectively emitted 10 percent of the world’s GHG emissions over the last five years. Revenues for the companies grew roughly 5 percent, while their emissions only increased by 1 percent over the most recent four-year period for which complete and comparable data is available (which was from fiscal year (FY) 2011 to FY2015 for 52 companies, FY2010 to FY2014 for 413 companies, and older data for the rest).
“Following COP21 last year, sustainable business growth has become a top priority and focal point for many organizations,” said Tim Nixon, managing editor of sustainability at Thompson Reuters and co-author of the report. “Limiting environmental impact is no longer just about doing the 'right' thing. Organizations recognize sustainable business growth is central to mitigating risk and driving top and bottom line performance.”
The findings are captured in Global 500 Greenhouse Gas Performance 2010-2015: 2016 Report on Trends, written in collaboration with BSD Consulting. The report also examines the changes in GHG footprints of the Global 500:
Of the Global 500 businesses with a GHG footprint of over 10 million tons, 26 had emissions that decreased by more than 8 percent – including Valero Energy, Dominion Resources, BP, NextEra Energy, Exxon Mobil, Chevron, The Southern Company, Duke Energy, BASF and The Dow Chemical Company – while 29 showed increases in GHG emissions of more than 8 percent – including Coal India, Devon Energy, Exelon, Praxair and Union Pacific.
The top 5 emitters were China-based PETROCHINA Company Limited and China Petroleum & Chemical Corporation, India-based NTPC Ltd, Luxembourg-based Arcelor Mittal, and Germany-based RWE AG. Several of those which had the largest decreases were also among the top 20 emitters, including Exxon Mobil, The Southern Company, and Duke Energy. NTPC, Nippon Steel & Sumitomo Metal Corporation, and Petrobras were among the top 20 emitters which also showed some of the greatest increases in emissions.
“We did find promising the trend on lower emissions growth versus revenue growth for the Global 500 as a whole, however many of the largest emitters have yet to show this kind of decoupling,” said John Moorhead, report co-author and the Head of Climate Change Practice at BSD Consulting.
“Although the gap with a 2 degree pathway for the Global 500 has decreased to 6.6% of total emissions the gap still remains significant. Carbon pricing, innovation (in technology and business models) and responsible investment are the keys to closing this gap.”