UK corporations face significant pressure to make progress on decarbonisation. Simply setting targets is no longer enough. Regulators, investors, and customers are increasingly expecting corporations to have more robust carbon emission measurements, proof of delivery against decarbonisation targets, and a better understanding of how to decarbonise in a way that generates financial value.

Measure: Many UK companies are still early in the journey of measuring and disclosing their climate impact. Of the approximately 1,450 UK-headquartered companies that disclosed through CDP on climate (including approximately 91% of FTSE 100 companies), only around 70% of those disclosed actual Scope 1 and 2 emissions data. Only around 50% disclosed Scope 3 emissions data, of which approximately one-third use no primary data to calculate emissions. Though some of this is promising, success requires companies to understand and quantify their emissions across all scopes. CDP’s supply chain membership program can help companies collect primary Scope 3 data, analyse it, and engage with their suppliers to reduce their Scope 3 emissions.

Set Targets: Target-setting is on the rise, but is still limited. A growing number of UK companies are setting decarbonisation targets, with an average 52% per annum growth in target-setting from 2020 to 2022. The targets set are ambitious, with an average of approximately 6.5% per annum absolute reduction in Scope 1 and 2 emissions, which is above the 4.2% per annum reduction required for the Science-Based Targets Initiative’s 1.5°C pathway. However, only around 26% of UK companies disclosing through CDP have active Scope 1 and 2 targets. This falls further for Scope 3, to only around 15% of UK companies. As a result, targets only cover 31%–36% of the base year emissions reported by UK corporations. Target-setting is clearly still insufficient.

Deliver: Delivery of targets is challenging. Companies are not always underpinning their decarbonisation commitments with robust, quantified, and costed transition plans. This manifests in under-delivery: of the UK companies that disclosed through CDP and that have targets, 26% failed to meet their targets for 2021 and around 20%–30% are off-track against their pre-2030 targets. This challenge is seen across industries, particularly on Scope 3. Once all companies are accounted for—even those not disclosing—the scale of the challenge is far larger.