FTSE firms fail on climate as poo power heats homes

Written by Lori Campbell on 1st Mar 2021

A third of the UK’s top firms emit enough carbon emissions to hike up global warming by a dangerous 2.7C, finds a new report, as Thames Water harnesses human ‘poo power’ to heat homes in London. Meanwhile, a Big Issue-backed fund that invests only in climate change solutions launches, local government pension funds are found to have almost £10 billion invested in fossil fuels and Aviva becomes the first major insurer worldwide to target net zero emissions by 2040. It’s the Good With Money news brief. 

Third of top UK firms set to hike up global warming by 2.7C

Three out of 10 of the UK’s biggest public companies emit carbon dioxide at a rate that would contribute significantly to the climate crisis, according to new analysis.

Thirty-one members of the FTSE 100, the index of Britain’s largest listed companies, are emitting carbon dioxide at a rate consistent with global temperature increases of 2.7C or more by 2050, according to Arabesque, a company that provides climate data to investors. It unveils the enormous scale of the challenge for corporate Britain to cut emissions to zero.

The rise would be above the target set under the 2015 Paris Climate Agreement to limit global heating to below 2C and attempt to limit it to 1.5C. A temperature rise of 2.7C would be likely to lead to severe damage to the environment and to human life.

It comes as UN Secretary-General, António Guterres says governments must halve emissions by 2030 if they intend the Earth to stay within the 1.5C “safe” threshold.

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Thames Water harnesses human ‘poo power’ to heat homes

Thousands of homes in London could soon be warmed by the waste from their local sewage works as part of England’s first poo-powered heating scheme.

Thames Water hopes to harness the heat of human waste from its treatment plant in Kingston upon Thames to warm more than 2,000 new homes that form part of a regeneration plan for the borough.

Typically, the water company flushes the clean warm water that remains after it has treated its customers’ sewage back into a local river system as effluent. But under the new plan it will funnel the warm water to an energy centre where it will help heat the water that warms local homes.


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New Big Issue-backed fund invests only in climate change

A new fund, launched by Aberdeen Standard Investments and The Big Issue Group, will invest only in companies that are working to tackle the the climate emergency and create a cleaner, more sustainable, world.

The Multi-Asset Climate Solutions (MACS) Fund searches the globe for companies that will make the biggest difference to climate change. To be included, more than 50 per cent of their revenues must come from climate solutions. Currently less than five per cent of the world’s listed companies fit the bill.

It also has strict ‘exclusions’. It won’t invest in any companies involved in destructive activities such as fossil production, nuclear power, cement and steel production, meat and dairy production, or which have high carbon emissions.

A fifth of the net revenue from the MACS Fund will be reinvested back into The Big Issue Group to help support its social mission.

You can invest in the MACS Fund either through The Big Exchange, from £25 a month or a lump sum of £100, or through an independent financial advisor on Standard Life’s Wrap and Elevate platforms.


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Council pension funds have £10bn in fossil fuels

Local government pension funds have almost £10 billion invested in fossil fuels, despite most having declared a “climate emergency”.

A new report by environmental campaign groups Platform and Friends of the Earth found that fossil fuel businesses accounted for three per cent of the total value of the Local Government Pension Scheme. Oil and gas investments accounted for £6.5 billion and coal for £3.4 billion in the 2019-20 financial year.

The biggest investments in fossil fuels by value were held by Greater Manchester, Strathclyde and West Midlands pension funds, according to the analysis. The administering authorities of all three pension funds have declared climate emergencies.


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Aviva sets target for net zero carbon footprint by 2040

Aviva has become the first major insurer worldwide to set a target to shrink its carbon footprint to net zero by 2040 – a decade earlier than most banks.

The firm, one of the UK’s top asset managers with £300 billion of investments under management, said it had written to the 30 biggest CO2 emitters in its portfolio, comprising companies in the oil and gas, utilities and mining sectors, asking them to sign up to the science-based targets aligned to the Paris climate agreement. It has demanded that they set net zero emission goals with fixed deadlines of 12 to 36 months.

Aviva said if they fail to take action it would sell its shareholdings in those companies, but added that it had been getting some “good responses”. It will report on progress towards its target every year.