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S&P 100 on Track to Miss Obama's 2020 Climate Goal

The top companies in the U.S. will fail to meet President Barack Obama's goal of cutting greenhouse gas emissions 17 percent by 2020, a new analysis found.

Based on data from 2007 to 2009, companies on Standard and Poor's 100 index will not only miss the 2020 target, their absolute emissions will actually increase if trends continue. The gap is even greater between projected emissions and the deep cuts recommended by Intergovernmental Panel on Climate Change.

"These trends identified by Carbon Disclosure Project (CDP) show business needs to take more active measures to reduce emissions, especially as the economy improves we can expect to see more significant increase in emissions," said Paul Dickinson, CEO of CDP, author of "S&P 100 Carbon Chasm."{related_content} According to CDP, reaching President Obama's 2020 goal would require an average annual reduction rate of 1.05 percent. The IPCC's suggested goal -- a 80 percent decline in emissions by 2050 -- would require a annual average decline of 3.9 percent. S&P 100 companies experienced an average annual increase of 0.36 percent. 

Meeting any emissions reduction goal would require the country's most carbon-intensive industries to do most of the heavy lifting, particularly utilities. Four sectors -- utilities, energy, materials and industrials -- generate 90 percent of the total emissions reported by S&P 100 companies.

Utilities, which account for 37 percent of total emissions, saw its emissions grow by an average rate of 1.64 percent annually. Industrials -- responsible for 7 percent of total emissions -- also saw average annual emissions grow by 2.03 percent over the last three years. This trend, CDP said, need to be reversed.

The materials and energy sectors, responsible for 12 percent and 34 percent of total emissions, performed better. The materials sector reduced emissions every year by an average rate of 0.77 percent, while energy companies improved their performance by 1.01 percent on average per year.

Carbon intensive sectors -- climate performance 2007-2009

As a whole, S&P 100 companies are on track to increase absolute emissions 3.66 percent in 2020, relative to 2009 levels.

"This shows that, the absolute emissions reductions we are seeing across industry are generally not sufficient to deliver on U.S. targets, particularly within the high intensity Utilities and Industrials sectors, which are experiencing emissions growth and are responsible for nearly half of S&P 100 reported emissions," CDP said in the report.

CDP notes several factors that may have impacted the results, such as improved carbon accounting, mergers and acquisitions, and the economic downturn. It was also only able to evaluate 51 percent of S&P 100 companies that provided sufficient data. 

Image CC licensed by Flickr user Mikael Miettinen.

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