Only 5% of FTSE 100 have ‘credible’ net zero plans, says report 

While a majority of FTSE 100 companies have disclosed net zero targets, only a few have outlined how they intend to achieve this goal.

Analysis conducted by EY on the net zero transition plans of FTSE 100 businesses has found that only 5 per cent have disclosed plans that are sufficiently detailed to meet the UK government’s Transition Plan Taskforce guidance.

EY also pointed out that even companies within this 5 per cent “have more work to do before their published plans can be considered fully TPT-aligned”, due to gaps in certain areas, such as financial planning or how financial metrics and targets are defined.

The UK government launched the TPT last year following an announcement at COP26 to develop “the gold standard for private sector climate transition plans”. In November, the TPT unveiled a draft disclosure framework, which was open to consultation until the end of February and which the taskforce is expected to finalise this year.

Rob Doepel, EY’s UK and Ireland managing partner for sustainability, said in a statement that with the expectation that the framework becomes mandatory “businesses should now be clear about what credible, detailed plans need to look like, and should have a good idea about the direction regulation is moving in”. 

“There can be no excuse for being unprepared, and the UK’s largest businesses need to push ahead with developing detailed, actionable plans that enable their organisations to transition and reap the benefits of net zero,” he continued.

While 78 per cent of FTSE 100 companies have disclosed partially developed plans that include public targets to achieve net zero emissions by 2050, according to EY they have “not yet adequately outlined how they will reach these targets”, meaning they miss key TPT framework requirements.

Meanwhile, 17 per cent of FTSE 100 companies are still in the stage of setting targets and are yet to publicly disclose any actionable plans.

The TPT Framework outlines five key elements required to create a “credible” net zero transition plan.

Doepel said: “Some corporates will remain wary of publishing transition plan material at this stage, particularly the financial planning elements required as part of the framework.

“This will likely be a consideration for the government as it looks to strike a balancing act between encouraging financial services to deliver on their green finance objectives while also encouraging companies to come forward with this information during the voluntary disclosure phase,” he continued.

According to the research, FTSE 100 firms scored best on the initial “foundation” stage of the TPT framework, which requires companies to publish transition objectives and priorities, as well as implications for the business modelling. 

In line with its overall findings, EY found that FTSE 100 businesses scored weakest against the framework’s “implementation strategy” element, which requires companies to disclose how they intend to adapt business planning and operations, as well as outline proposed changes to products and services. Only 11 per cent of companies have published materials that relate to this section.