Real estate investment trusts and major house builder feature in leading FTSE 100 sustainability report
EcoAct, an international climate and sustainability consultancy, has released the 10th edition of its Sustainability Reporting Performance of the FTSE 100.
The report, which includes a leader board ranking the top 20 companies for environmental sustainability disclosure reveals that although an increasing number of companies are setting a Net Zero target, there is an absence of a clearly defined strategy for many.
Real estate investment trusts have scored particularly well with both Landsec and British Land ranking at positions three and six respectively. They are only two of sixteen companies across the FTSE 100 that have demonstrated a detailed strategy to reach net zero and both are aiming to achieve it by 2030. Their rankings reflect efforts to set ambitious science-based targets (SBTs); align reporting with Task Force on Climate-related Financial Disclosures (TCFD); reduce energy consumption and incorporate sustainable finance into investment frameworks.
Also of note is Barratt Developments which ranks within the top 20 at 16th position having moved up an impressive 21 places in the ranking since last year. The company also announced this year that it is committed to achieving net zero by 2040 and has set an SBT.
According to the UK Green Building Council, the built environment accounts for approximately 40 per cent of the UK’s carbon emissions. With net zero transition strategies needing to be in place by 2030 with a net zero target no later than 2050, focus and pressure will inevitably turn towards the real estate and construction sectors to facilitate an urgent low-carbon transition. This is likely to be a leading driver in the sustainability performance improvements seen in the industry this year.
“Over the ten years we have undertaken this research, we’ve continued to see year-on-year improvements to climate-related reported best practice,” says Stuart Lemmon, CEO, Northern Europe, EcoAct. “Although we are encouraged to see an uplift in company commitments to Net Zero this year, if we are to succeed in this goal, it is imperative that commitments are backed by sound and achievable strategy.”
Scores allocated to all FTSE 100 companies in the report range from 0% at their lowest to 92 per cent at their best, demonstrating a highly disparate mix of sustainability performance and indicating that adequate climate-related reporting is still not a given in large companies. Looking at the real estate, construction and home building sectors, this is particularly relevant, with companies such as the Landsec, British Land, Barratt and the Berkeley Group having performed well while many others have performed poorly.