European firms are still outperforming international rivals when it comes to carbon emission reporting and management, but they could yet miss EU emissions targets unless an improved regulatory framework is established beyond 2012.
That is the conclusion of the the latest study from the Carbon Disclosure Project (CDP), an investor-backed lobby group which requests firms report publicly on their carbon emissions and climate change strategies.
The CDP 2010 Europe 300 Report found that the index of the 300 top European firms maintained its position as the global leader for carbon disclosure, with 84 per cent of firms responding to the CDP questionnaire, compared to 70 per cent for the US S&P 500 and 41 per cent for the Japan 500.
It also found that 79 per cent of reporting firms have set an emissions reduction target.
However, the majority of those targets will expire by 2012 and less than a quarter of the companies reporting on their carbon emissions have set targets beyond 2015.
As a result, Europe's largest companies are set to deliver average emissions cuts of just 1.5 per cent per year if they achieve their targets, falling short of the planned decrease in absolute emissions under the EU Emissions Trading System (EU ETS) of 1.9 per cent a year between 2013 and 2020.
They are also well adrift of the the 4.1 per cent a year cuts that will be required if the EU decides to increase its emissions reductions target for 2020 from 20 to 30 per cent below 1990 levels.
"More needs to be done," said CDP executive chairman Paul Dickinson. "EU regulation has driven companies to report in high numbers and put climate change on the boardroom agenda. We now need a confirmed, longer-term policy vision for business to invest in low carbon and encourage new technology."
The report comes just weeks before global leaders meet at the UN's climate change summit in Cancun, where they will look to deliver a series of agreements that could pave the way for a binding climate change treaty next year.
Observers are sceptical that significant progress can be delivered in Cancun, but Connie Hedegaard, European commissioner for climate action, said it was vital that Europe continued to push for an ambitious deal.
"Ensuring Europe maintains its leadership position and reaps the full economic benefits of the low-carbon revolution requires a continued strong push from the policy side," she said. "This is one reason the European Commission has put decarbonising the economy at the heart of our vision for Europe's development up to 2020 and beyond."
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