The Financial Times' listing of Europe's Climate Leaders makes interesting reading and it's great to see financial services leading the charge.
The list covers scope 1 (those produced by the company itself) and scope 2 (produced in generating the energy used by the company) emissions. Absolute values for scope 3 emissions (those which occur at other points on the value chain) have not been included in the list due to huge variations in the way such emissions can be reported.
As scope 3 emissions account for the majority of companies' emissions, this is disappointing and, in respect of financial services, leaves us without a clear picture of the emissions being financed by the sector. As we move toward COP26 in November, my hope is that there can be a focus on simplifying climate and emissions reporting, both to make it easier for customers and stakeholders to make decisions and to allow businesses of all sizes to measure and make those all important improvements.
Financial services is the top-performing sector — a factor that may partly explain the UK’s performance, given London’s dominance in this area — but that does not mean that the 40 firms in question can rest on their laurels. Sustainability-minded investors are becoming increasingly concerned about so-called “financed emissions”, which arise from activities enabled by banks’ backing yet fall outside their core emissions.