London — Fewer than 20% of transport companies globally are aligned with the Paris Agreement on climate change, a group of asset owners and managers said in a report Dec. 9.
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The findings highlight the scale of action needed within the transport sector to decarbonize without overshooting globally agreed temperature targets.
"The transport sector drives demand for fossil fuels and is responsible for nearly a quarter of total energy-related CO2 emissions worldwide," said the Transition Pathway Initiative -- a group backed by 90 investors with over $23 trillion of combined assets under management.
"However, new investor research on 62 of the world's largest transport companies finds that less than one in five (18%) have emissions reduction plans in line with a path to keep global warming to 2 degrees Celsius or below by 2050," the group said.
The report was carried out on behalf of the Transition Pathway Initiative by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.
"For investors, transition risks remain, with transport assets including vehicles, factories and infrastructure in danger of becoming stranded," said TPI co-founder and chair of the UK Environment Agency Emma Howard Boyd.
The group's figures show that while the emissions reduction plans of the transport sector as a whole have improved modestly compared with 2019, the airlines sector is a "clear laggard and has the worst Carbon Performance score of any industry assessed by TPI," it said.
"In total 91% of airline companies fail to align with even the least ambitious climate targets (the Paris pledges) by 2050 – almost double the proportion in the automobile sector (where 48% fail to align with at least the Paris pledges)," it said.
One reason for aviation's relatively poor performance is its wide use of emissions offset credits to contribute to emissions reduction plans, the TPI said.
The TPI's methodology, based on the International Energy Agency's models, discounts offsets partly due to uncertainty in quantifying them and because emission reductions must be achieved directly within the aviation sector itself to be comparable with assessments of other industries.
"Encouragingly, today's data shows six airlines have this year committed to gross emissions targets that exclude the use of offsets (Azul, EasyJet, IAG, Turkish Airlines, United Airlines and Wizz Air)," the TPI said.
Under the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation, airlines agreed to offset any emissions growth above a 2019 baseline by buying carbon offset credits from approved emissions reduction projects.
The global CORSIA system -- which effectively holds aviation's net emissions steady at 2019 levels -- is one part of a wider basket of measures the sector is deploying to reduce its environmental impact.
Other measures include improved airframe designs, the use of sustainable aviation fuels and efficiency improvements of ground-based operations.