Thomson Reuters has published its fifth Greenhouse Gas Report. We spoke to Tim Nixon – Head of Sustainability Thought Leadership and co-author of the report - to find out the details.
Can you give us some background on the Greenhouse Gas Report and why it is critical?
Tim: In Paris at the end of 2015, the global community pledged to reduce fossil fuel usage based on the consensus that the world’s average temperature (devised through scientific modeling that incorporates average temperatures and normal variations) cannot rise above 2 degrees Celsius or we will face economic and environmental destabilization.
Every year the Intergovernmental Panel on Climate Change (IPCC) provides guidance on how much we need reduce our emissions—year-on-year—to prevent global warming above these 2 degrees. The current guidance is an annual reduction goal of 1.4% by all state and non state actors (e.g. private sector.)
In contrast, many in the private sector focus a great deal on reaching zero emissions by a target date. But these goals miss the point. The private sector needs to adhere to the IPPC guidance for year-on-year reductions.
To help inform this conversation, this report measures the trends in emissions of the 3500 or so largest corporations of the world.
Our aim is not to blame and shame companies; our focus is to create real transparency around the largest sources of green house gas emissions from the private sector. This includes utility and energy companies. And to answer the question ‘How are their emissions trending over time?’
Through the reports, we’ve created transparency around these 3500 emitters; are they declining their emissions within IPCC guidelines, or not?
Does anyone change their actions as a result of the GHG Report?
Tim: Well, that’s the power of transparency. The idea here is that if we create an ongoing report around who these emitters are and how are they performing in relation to the IPCC guidance, then their stakeholders such as investors and regulators can take a look at that and ask additional questions.
So the report has a real world impact?
Tim: It does. Most of the impact is behind the scenes, but every time we publish, I get emails from our client base – mostly the financial community – thanking us for publishing and saying how useful it is.
Why is it useful to the financial community?
Tim: Because if you’re an investor, or managing an investors’ money, it gives you a sense at a company level (because we report at a company level, not just industry level), who is appearing to manage their greenhouse gas emissions in line with global policy guidance and who isn’t. You may want to know more about a company you have invested in and find out what their strategy is because they don’t appear to be following guidance. It could be seen as a way of balancing risk.
How did the report come about?
Tim: My co-author, John Moorhead and I met at a sustainable investing conference in Zurich, and we and came to the conclusion that the report was needed and that Thomson Reuters has the data needed to create it. We work closely with Andre Chanavat who is the product manager for Thomson Reuters ESG, to complete the first report.
In fact, part of Thomson Reuters ESG product includes a patented system of estimating emissions when companies aren’t transparent about them, so even in that situation we can create a holistic view through this patented methodology. Disturbingly, only just over 50% of the 3500 companies we cover actually report their emissions.
The report demonstrates the comprehensive data that Thomson Reuters holds and manages so we can do apples to apples comparisons of company’s emissions. The regular reporting was a vision three years ago and time has now shown us that this data and its trends really, really matter.
For how long have you been publishing the report?
Tim: This will be our fifth report in three years. For the first time we are working directly with COP 22 – the supreme decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC), and the United Nations Environment Programme (UNEP) and their scientists who work on the climate treaty. They have also come to the conclusion that corporate – non state actors are actually crucial to really managing the climate challenge, so in the sense of reporting data around this, Thomson Reuters is providing key answers.
And having data like ours, and creating the transparency we do will be critical to reducing emissions in time to have a chance to stay within those 2 degrees.
So it’s really exciting because years ago we had the vision that this non state actor thing was really going to matter because of the difficulties of enforcing actions within a political treaty, like Paris. It turns out that it does really matter and it matters more and more because the gap between where we are and where we need to be is growing bigger and bigger.
In 2010 we should have been reducing, but we’ve actually increased emissions every single year since then, so now we actually have to reduce even more year over year than we had originally set the target for.
The trend is not good, and there is urgency around creating transparency and driving change.
Global 3500 Greenhouse Gas Performance 2010-2015 – Read the full report