Energy companies are least prepared to meet carbon-cutting targets recently agreed upon in Paris by nearly 200 nations, according to an analysis by index provider MSCI Inc. Only 16 out of 146 members of the high-emitting energy sector in MSCFs All Country World Index have carbon targets that are in line with country commitments made under the deal. Another 112 energy companies lack reduction targets altogether. Other laggards include two more top emitters: the materials and utilities sectors. The MSCI warned that if companies continue to lag behind government policies, they could face higher costs of compliance in the form of carbon taxes, fines and increased capital expenditures to switch to low-carbon technologies. The analysis looked at how prepared the world's companies are for the level of carbon reduction implied by the new climate change agreement, signed Dec. 12, by comparing their existing carbon mitigation efforts against proposed country reduction targets and against an overarching goal to limit global warming to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels.
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