In partnership with The Climate100 Index april 2021 Contents Introducing the Climate100 Index 3 Meet the FTSE 4 The Rankings 5 The Findings 6 Who’s leading in the Climate100 Index? 6 Who’s lagging behind? 6 Measuring emissions 6 Top Emitters – all direct and indirect emissions 8 Who’s decreased emissions? 10 Who’s increased emissions? 11 Emissions intensity 12 Energy 14 Water 15 Waste 15 The CDP 15 The path to net zero 15 Inside the Index 17 Guiding Principles 18 Talk vs Walk 18 Tortoise Media 22 Berners Street Fitzrovia London w1t 3lp © Tortoise Media 2021. No part of this index may be reproduced without permission. All rights reserved Report by the Tortoise Intelligence team. Any queries, or suggestions about the Climate100 Index, please contact [email protected] Design: Oliver Bothwell, Nick Stone In partnership with Cover illustration: Julia Allum Introducing the Climate100 Index Welcome to the Tortoise Climate100 Index, in partnership with Teneo. This special report coincides with the bi-annual update of the Responsibility 100 Index, our ranking of the FTSE 100 companies on their commitment to key social, environmental and ethical objectives. The Climate100 Index is a detailed assessment of the climate-related data drawn from the Responsibility100 Index, and measures the gap between the words and actions of some of the world’s biggest and most carbon-intensive companies. A firm commitment to divestment, decarbonisation and sustainability has never been more urgent for the FTSE 100. The welfare of the planet is a crucial factor in determining the well- being of all life on Earth, and companies must act fast to ameliorate the many severe processes of climate change that are already underway. In this year of decisions, and in the run up to COP26, the companies of the FTSE 100 face an emergency. Those that make and follow through on substantial commitments to alter their course and address climate change deserve recognition. Those that do not must be held accountable. The Climate100 Index focuses on the factors that are important to this change, and presents a comprehensive data set and ranking based on the climate-related aspects of the FTSE 100’s actions. We are delighted to present the 2021 index in partnership with Teneo, a global advisory firm that provides strategic counsel to CEOs and senior executives of the world’s leading companies, across their full range of key objectives and issues. As CEOs face an imperative to prioritise ESG as a key aspect of value creation no company can ignore, silo, or treat as a supplementary practice. We hope you find the index and information contained in this report insightful and informative as work in collaboration to accelerate the journey to net zero. Alexandra Mousavizadeh Editor & Partner, Tortoise Media “ 2021 will be a pivotal year for the FTSE100. Leadership is rising to the climate challenge and to the public’s desire for a fairer society. They are re-setting ambitions to accelerate innovation and action. The Responsibility 100 is one good way for all their stakeholders to track their progress.” Fraser Hardie Chairman, Teneo UK In partnership with 3 of 19 Meet the FTSE The FTSE 100 are the largest group of companies on the London Stock Exchange, by market capitalisation. These companies are often sector leaders, large employers and market innovators. Their actions are an indicator of the current business environment and a standard for other businesses around the world. The FTSE 100 have offices and subsidiaries all over the world, meaning that smaller subsets of their operations span the entire globe and affect international markets and supply chains. In their most recent reporting year; – the companies made a combined revenue of £1.59 trillion – employed a total of 4.1 million people Engineering Services Extraction Retail & Finance Travel Pharma consumer Aerospace Digital Energy Beverage Banking Travel Pharmaceuti- Services cals Chemicals Media Mining Consumer Financial Goods Services Construction Software Fashion Insurance Engineering Support Packaging Real Estate Services Industrials Telecommuni- Supermarkets cations Utilities Tobacco Where are the FTSE 100 headquartered? United Kingdom 87 Luxembourg 1 Ireland Czechia 5 1 Netherlands 1 Mexico 1 Australia South Africa 2 1 In partnership with 4 of 19 The Rankings Land Securities, a property development company, leads the inaugural rankings of the Climate100 Index, updated as of 29 April 2021. Top 50 companies Bottom 50 companies Walk Talk Gap Walk Talk Gap Land Securities 1 1 0 Antofagasta 51 74 23 British Land 2 6 4 St. James’s Place plc 52 59 7 Burberry 3 5 2 Imperial Brands 53 26 -27 Unilever 4 10 6 Sage Group 54 88 34 BT Group 5 2 -3 Legal & General 55 32 -23 RELX 6 9 3 Prudential plc 56 60 4 Natwest Group 7 8 1 Spirax-Sarco Engineering 57 57 0 United Utilities 8 31 23 B&M 58 98 40 Berkeley Group Holdings 9 19 10 Segro 59 71 12 London Stock Exchange Group 10 38 28 Ferguson plc 60 77 17 Lloyds Banking Group 11 35 24 Smiths Group 61 67 6 Severn Trent 12 29 17 Experian 62 74 12 Barclays 13 44 31 Bunzl 63 79 16 RSA Insurance Group 14 43 29 Smurfit Kappa 64 42 -22 Coca-Cola HBC 15 25 10 Rio Tinto Group 65 53 -12 Taylor Wimpey 16 45 29 Standard Chartered 66 22 -44 Barratt Developments 17 20 3 Intermediate Capital Holdings 67 82 15 Phoenix Group 18 49 31 Melrose Industries 68 97 29 Mondi 19 18 -1 Aviva 69 33 -36 Diageo 20 16 -4 Croda International 70 37 -33 3i 21 88 67 Weir Group 71 77 6 Next plc 22 47 25 Intertek 72 63 -9 Informa 23 24 1 National Grid plc 73 17 -56 Renishaw 24 79 55 Entain 74 82 8 Kingfisher 25 21 -4 DS Smith 75 56 -19 Vodafone Group 26 11 -15 Polymetal International PLC 76 52 -24 Tesco 27 7 -20 Anglo American plc 77 51 -26 GlaxoSmithKline 28 4 -24 InterContinental Hotels Group 78 30 -48 Associated British Foods 29 87 58 Ocado 79 82 3 Persimmon plc 30 71 41 Royal Dutch Shell 80 41 -39 Schroders 31 28 -3 Halma 81 71 -10 Pearson plc 32 12 -20 SSE plc 82 13 -69 HSBC 33 15 -18 Auto Trader Group 83 88 5 Hargreaves Lansdown 34 88 54 Fresnillo plc 84 64 -20 Smith & Nephew 35 67 32 Aveva 85 85 0 BAE Systems 36 79 43 Rentokil Initial 86 70 -16 Reckitt 37 23 -14 Compass Group 87 39 -48 British American Tobacco 38 40 2 Hikma Pharmaceuticals 88 64 -24 AstraZeneca 39 3 -36 Rolls-Royce Holdings 89 62 -27 Standard Life Aberdeen 40 36 -4 Flutter Entertainment 90 88 -2 WPP plc 41 14 -27 BHP 91 58 -33 M&G 42 60 18 Avast 92 88 -4 Admiral Group 43 88 45 DCC plc 93 88 -5 Whitbread 44 74 30 Glencore 94 66 -28 JD Sports 45 46 1 Ashtead Group 95 88 -7 Johnson Matthey 46 67 21 Evraz 96 55 -41 Sainsbury’s 47 27 -20 Homeserve 97 85 -12 International Airlines Group 48 34 -14 BP 98 54 -44 Rightmove 49 48 -1 Just Eat Takeaway.com 99 98 -1 CRH plc 50 50 0 Scottish Mortgage Investment Trust 100 98 -2 In partnership with 5 of 19 The Findings Who’s leading in the Climate100 Index? Our Index leader, Land Securities, is one of only 14 FTSE 100 companies to receive an “A” rating from the CDP as its Climate Score; this suggests that its performance and reporting against the CDP’s comprehensive measures are both solid. Three other companies in the Top 5 – Burberry, Unilever and BT Group – also receive an “A” rating from the CDP. Land Securities and Burberry also achieved their targets to limit the amount of waste sent to landfill, with their recycling rates standing at 73 and 75 per cent respectively. BT Group makes use of renewable energy for 89.9 per cent of its total consumption, well above the FTSE 100 average of 38 per cent for those companies that also report. Burberry and British Land – also in the Top Five of the Climate100 Index – exceed the average at 83 and 77 per cent respectively. All five companies decreased their total year-on-year energy consumption, with Burberry making the largest percentage reduction at nearly 10 per cent. Our Index leaders practice what they preach; four of the Top Five companies also rank well in our “Talk” pillar. In other words, they set plenty of clear, measurable climate-related targets and they outperform their peers when it comes to our “Walk” indicators. Who’s lagging behind? Scottish Mortgage Investment Trust ranks bottom of the Climate100. The investment group has no offices or employees and therefore does not report its emissions or other key climate data, including mandatory Scope 1 and 2 reporting Second-to-last is food delivery company Just Eat Takeaway.com. Alongside Scottish Mortgage Investment Trust, they are one of just two companies not to report their Scope 1 and 2 emissions data, as well as most other environmental reporting. A lack of transparency overwhelmingly contributed to poor performance in our Index. For example, of the bottom five companies, only BP reports its Scope 3 emissions – i.e. greenhouse gas emissions that occur along the company’s value chain. Other “bottom five”companies include oil and gas giant BP and home improvements business Homeserve. Both received an “F” rating from the CDP. This suggests that the companies have weak reporting on climate-related metrics – from emissions to waste.