The global utilities sector is leading the way in terms of achieving its net-zero goals and enhancing its ESG credentials, according to Fidelity International’s 2023 ESG Analyst Survey.
The $663.1-billion asset manager’s third annual report, which features insights from 123 global ESG analysts, delves into the credibility of corporate net-zero transition plans, revealing that “most companies surveyed aren’t spending enough to hit their net-zero targets by the end of this decade.”
Currently, less than 60% of companies tracked by Fidelity’s ESG analysts are on track to cut their carbon emissions to net-zero by 2050, the fund manager revealed. Only one in four will do so by the more ambitious target of 2030.
Despite this, the world’s big companies are listening, Fidelity said. “Most developed-world multinationals have committed to net-zero targets, with 69% of European companies allocating the funds needed to hit those targets by 2050.”
The global utilities sector “stands out as a success story,” with analysts suggesting that almost four-out-of-five companies will reach their net-zero targets by 2050.
Utilities also ranks as the most likely sector to make “significantly greater ESG efforts than they promote.” The energy and communication services sectors ranked as the most likely to promote better ESG credentials than their actions justify.
The report goes on to suggest that there has been a “maturing of corporate behavior around ESG,” estimating that 39% of the 15,000 corporate meetings assessed now annually include engagement on ESG issues.
ESG most frequently makes the agenda at the annual meetings of companies in the materials, energy and consumer staples sectors. In contrast, the real estate and healthcare sectors are less likely to discuss ESG.