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MARKET SNAPSHOT
Index Carbon Analysis: FTSE100 - May 2025
Our latest Market Snapshot examines emissions trends across London’s FTSE100 index. It highlights the out-weighted impact that legacy industries can have on the carbon profile of an index, and the potential cost and risks to an economy.
Key Findings:
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Scope 1&2 emissions were flat in 2024, Scope 3 ticked up
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Top 5 emitters represent ~75% of index emissions (~16% of market cap)
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Index faces 68% potential carbon liability under IPCC Net Zero scenario by 2050
Analysis of Scope 1 and 2 emissions reveals that the overall stability conceals a significant increase in the Industrials sector. This increase is primarily due to the post-COVID resurgence in travel. It is partially offset by emissions reductions in the Non-Energy Materials, Energy and Utilities sectors.
The FTSE100 includes a number of oil and gas giants. Some of these companies (notably Shell, BP and Anglo American) are making strategic moves into low-carbon technologies, which have led to reductions in their Scope 1 and 2 emissions between 2022 and 2024. Meanwhile, others such as Rio Tinto and Glencore have doubled down on extraction-based business models, leading to continued increases in total emissions in the period.
For investors, and the global economy, fossil fuel-generated energy and mineral extraction are important and profit-making sectors. However, these patterns translate into markedly different transition risk profiles - maintaining carbon-intensive operations will likely result in significantly longer-term losses as climate policies tighten globally.
This analysis forms part of our regular series examining carbon footprints across major indices, providing investors with actionable insights into sector patterns and transition risks. If you'd like to subscribe to receive future Market Snapshots direct to your inbox, you can at the bottom of this page.
Importantly, for market participants wanting to invest in Asia’s growth potential, we also highlight the concentrated nature of emissions in this market - ~80% of the index's total emissions are produced by 10% of its market cap, led by energy giants PetroChina and China Shenhua Energy.
More metric-specific details coming soon...
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