Europe's Climate Leaders 2024: interactive listing - Financial Times

Europe’s Climate Leaders 2024: interactive listing

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A hotter planet, scientists say, means harsher weather: storms, floods, droughts, fires. For Europe’s businesses and politicians, it also means tougher conditions, as new regulations designed to combat climate change start to bite.

Under the EU’s Green Deal— which aims to make Europe “the first climate-neutral continent” — companies must contend with more carbon pricing, tougher sustainability targets, and broader reporting requirements. This has prompted warnings about reduced competitiveness from industry groups, as well as outright protests — such this year’s demonstrations by farmers, which forced the European Commission to water down several green measures.

Yet the fourth edition of Europe’s Climate Leaders — compiled by the Financial Times in partnership with data provider Statista — shows that growing numbers of European companies are already making headway in cutting greenhouse gas (GHG) emissions.

The list focuses primarily on businesses that have achieved the greatest reduction in their Scope 1 and 2 GHG emissions intensity over a five-year period (2017-22 for this edition). Scope 1 and 2 emissions — “core emissions” in the table — come respectively from a company’s own operations and from the energy it uses, while intensity is defined as tonnes of emissions of CO₂-equivalent per €1mn of revenue.

Other factors are considered, too, such as companies’ transparency on Scope 3 emissions, which arise elsewhere in their value chains, and their collaboration with sustainability assessors, such as CDP and the Science Based Targets initiative (SBTi). These factors are assigned a score, which is combined with the reduction in emissions intensity figure, to produce an overall total for each company. Further details of the methodology can be found in the panel at the end of this article and on Statista’s website.

This year the highest-scoring company is National Air Traffic Services, the UK air traffic control provider, with 88.8 points, followed by Swedish telco Tele2 — last year’s top scorer — and Spanish fashion group Inditex.

As in all previous years, financial services accounted for the greatest number of companies in the list, this time 10 per cent of them. Next came construction and building materials (8 per cent), then transport, logistics, and packaging (7 per cent). Once again, the UK was home to the greatest number of companies — 23 per cent — followed by Germany (12 per cent) and France (11 per cent).

A steady increase in corporate emissions data means that this year the Climate Leaders list comprises 600 companies, compared with 300 when it began in 2021. And, from the initial longlist of about 2,000 candidate companies, the number meeting the key threshold of reducing their core emissions intensity by more than 3 per cent a year, rose this year by 35 per cent. It is striking that this year’s lowest-scoring company has a score of 61, beating the lowest score of 55 on last year’s 500-strong list.

While such developments are promising, the Climate Leaders methodology has shortcomings. It prioritises Scope 1 and 2 emissions because it is mandatory to report these, so data is both readily available and comparable. Companies’ Scope 3 emissions are typically far greater but, because reporting remains voluntary and there is no standard metric, definitive comparisons are harder to make — hence the focus on transparency instead of absolute numbers.

Scope 3 emissions are particularly high in the “fast fashion” sector, with companies including Inditex facing pressure from sustainability campaigners and EU legislators over business models that also generate a lot of waste.

In any industry, it is possible for a fast-growing company to reduce its emissions intensity while increasing its absolute emissions (represented in the table by negative figures in the “total reduction of core emissions” column). So, this year, we have factored performance on cutting absolute emissions into the scores, for the first time.

Sometimes, companies’ own carbon accounting, whether cited in corporate reports or submitted to CDP, may be inconsistent or lack key details. To mitigate this risk, the figures reported for 2017 and 2022 by the biggest emissions cutters, in terms of both intensity and absolute emissions, have also been scrutinised by GreenWatch, a sustainability research team based at University College Dublin. Its findings have been added to the table as footnotes.

The editors reserved the right to exclude companies if their broader environmental record — on non-GHG pollution, for example, or deforestation — was sufficiently disputed to undermine any claim to be a “climate leader”. Energy companies prospecting for new fossil fuel reserves and businesses censured by regulators for greenwashing fell into this category, as did banks increasing their financing of fossil fuels.

Despite these qualifications, it is clear that the companies on the list are trying to reduce their carbon footprints, and with some success. Whether this will enable Brussels and national governments to hit their emissions goals is another matter: the European Environment Agency estimates that the EU is likely to have cut carbon emissions relative to 1990s levels by 48 per cent by 2030, rather than the 55 per cent it is aiming for.

Meanwhile, climate records continue to be broken, with record land and sea temperatures over the past year, helping push the global average beyond 1.5C over the pre-industrial average. That is the preferred maximum under the UN’s 2015 Paris Climate Agreement, though a longer period is required at that temperature for the threshold scientifically to be breached.

If that were not enough, the World Meteorological Organization says that Europe’s temperature rise is twice the global average. The continent’s business leaders and policymakers can look forward to more stormy weather.

A print and online report on Europe’s Climate Leaders will be published on May 16, containing articles analysing the issues that this research raises

[1] Compound annual reduction rate (CARR) based on the sum of Scope 1 and 2 emissions and adjusted by revenue growth between 2017-2022.

[2] Calculated for 2022

[3] Absolute change in GHG emissions between 2017 and 2022. Positive values reflect a reduction in emissions, negative values an increase. All the companies on the list have, however, cut their emissions intensity.

[4] Scope 3 refers to indirect emissions, which can be reported for some or all of 15 categories and thus vary enormously. This is why absolute figures are left out here.

[5] CDP is a non-profit organisation that assesses how well companies and other bodies report on and reduce their environmental impact.

[6] SBTi is a partnership between CDP, the UN Global Compact, the World Resources Institute and WWF and helps companies set targets for reducing greenhouse gas emissions.

GreenWatch assessment

[a] This company’s core emissions intensity performance might have been different if the Scope 1 and 2 emissions detailed in its annual report were fully consistent with the figures it submitted to CDP, and if it had provided more comprehensive disclosures on the use of renewable energy products to offset Scope 2 emissions.

[b] This company’s core emissions intensity performance might have been different if the Scope 1 and 2 emissions detailed in its annual report were fully consistent with the figures it submitted to CDP.

[c] This company’s core emissions intensity performance might have been different if the Scope 2 emissions detailed in its annual report were fully consistent with the figures it submitted to CDP, and if it had provided more comprehensive disclosures on the use of renewable energy products to offset Scope 2 emissions.

[d] This company’s core emissions intensity performance might have been different if the Scope 2 emissions detailed in its annual report were fully consistent with the figures it submitted to CDP.

[e] This company’s core emissions intensity performance might have been different if additional information about the use of renewable energy products to offset Scope 2 emissions had been disclosed.

[f] Having reviewed this entry, GreenWatch does not have a material comment on this company’s core emissions intensity performance.

To make comparison easier, we have used the same GreenWatch footnote system as last year; this year no companies fall into categories [d] and [f]

We are grateful to the Rainforest Action Network for providing analytical support to inform the Europe’s Climate Leaders list

Methodology

Europe’s Climate Leaders 2024 is a list of 600 European companies that have achieved the greatest reduction in their greenhouse gas (GHG) emissions intensity and made further climate-related commitments. These two factors are combined to produce an overall score for each company.

For the first of these, the compilers looked for the businesses whose GHG emissions intensity fell the most between 2017 and 2022. Emissions intensity is defined as tonnes of Scope 1 and Scope 2 emissions of CO₂-equivalent per €1mn in revenue. The 2017 and 2022 figures were used to calculate the compound annual rate of reduction, expressed as a percentage, which contributed 80 per cent of the overall score.

For the second, the compilers assigned a score based on: transparency and extent of Scope 3 emissions reporting; reduction in absolute Scope 1 and 2 emissions; and commitment to net zero and collaboration with CDP and SBTi. This accounted for 20 per cent of the overall score

All European companies — defined as having headquarters in one of 33 European countries — with a minimum revenue of €40mn or £36mn in 2022 were eligible for consideration. For non-euro countries, the currency value equivalent as of 31/12/2022 was the threshold.

A call for entries in October 2023 invited prospective participants to complete a short questionnaire about their GHG emissions between 2017 and 2022, and their revenue over the same period (or, for banks and insurance companies, total income). Statista also conducted independent research, scrutinising data from about 2,000 companies and inviting possible candidates to register.

For businesses with a rating from CDP, only those with a score of at least B- were considered. Companies that do not work with CDP were still eligible, but for any company annually emitting more than 2mn tonnes of CO₂-equivalent, a CDP score of at least A- was mandatory.

The editors also reserved the right to exclude companies if their broader environmental records, beyond reported Scope 1 and 2 emissions, were sufficiently disputed to undermine any claim to be a “climate leader”.

All companies for which relevant data was found — both those that registered and those independently identified — were contacted so that they could review the data. Of those, the 600 with the greatest reduction in emissions intensity have made it into the final list of European Climate Leaders 2024.

Fuller information about the methodology is available from Statista. Although extensive research was carried out, the list does not claim to be complete, as some companies did not publish their figures or did not participate.