New study from Clarity AI analyzes the content of corporate transition plans, examining the adoption of controversial decarbonization tactics, such as carbon credits and negative emissions technology
London – June 17, 2024 – Clarity AI, the leading global sustainability tech platform, today announced the release of its Credible Climate Transition Plans: Insights from an AI-Driven Analysis of Corporate Disclosures study. Leveraging a large language model (LLM) to collect and process the data, the study analyzes the climate transition plans of over 300 of today’s highest emitting companies across sectors such as oil and gas, utilities, aerospace and defense, and others. The study aims to identify the number of high emitting companies with reduction targets that reported and quantified their decarbonization measures, as well as other key trends.
“It’s no longer enough to look at companies’ commitments and ambitions regarding carbon reduction targets. Nowadays, investors are eager to understand the credibility of these commitments and want to know whether companies have a realistic and meaningful plan to achieve them”, said Nico Fettes, Director of Climate at Clarity AI. “This information is often buried in various documents and presented in different forms. AI can efficiently retrieve and process this data at scale, providing investors with relevant and timely information for their investment and engagement processes.”
Key findings from the study include:
High emitting companies with carbon reduction targets largely fail to quantify the impacts of their decarbonization measures
While over 80% of the analyzed companies reported on their decarbonization measures, only 40% of all companies made a clear quantification of the impact of these measures – with Japanese firms (67%) and European (48%) firms the most likely to do so.
Over 60% of oil and gas businesses fail to quantify their decarbonization measures impact
Businesses in the oil and gas sector (62%) were the most likely to not quantify their decarbonization measures, followed by those in the chemicals and automotive manufacturing (44% each) and utilities (43%) sectors. Furthermore, oil and gas companies were also the least likely to report their decarbonization measures and quantify their impact, with only 24% doing both. In addition, 14% of oil and gas companies do not report on decarbonization efforts entirely.
Several sectors rely heavily on controversial decarbonization levers
Carbon credits and negative emissions technologies feature prominently in the decarbonization efforts of several high-emitting sectors. When analyzing the use of carbon credits in decarbonization, aerospace and defense (38%), trading companies and distributors (38%) and oil and gas (32%) companies were the biggest users. In addition, steel (73%), oil and gas (70%) and trading companies and distributors (46%) were the biggest users of negative emissions technologies.
For more information on Clarity AI and to download the full Credible Climate Transition Plans study, please visit the Whitepapers section at Clarity AI
About Clarity AI
Clarity AI is the leading sustainability tech company, leveraging advanced technology and AI to provide data-driven environmental and social insights to investors, corporates, governments, and consumers. AI has been at the core of Clarity AI’s offering from the start, supporting a fully flexible set of data solutions, insights, analytics capabilities, and tools used for portfolio management, corporate research and engagement, benchmarking, regulatory reporting, online banking, and e-commerce customer experience.
Within the investment sector, Clarity AI serves a direct network of clients managing over $50 trillion in assets and includes firms like Invesco, Nordea, Lazard Asset Management, and Santander. Our strategic partnerships with financial institutions such as BlackRock, the London Stock Exchange Group (LSEG), BNP Paribas, Caceis, or SimCorp, allow thousands of users to access Clarity AI advanced data analytics capabilities through their usual investment platforms, ensuring a seamless workflow experience. Additionally, our partnerships with platforms like Diligent, boasting one million users, or Klarna, currently reaching over 150 million online buyers, benefit corporates and consumers alike. Clarity AI has offices in North America, Europe, and the Middle East. For more information visit www.clarity.ai
