The vast majority of public-listed companies still lack credible climate transition plans aligned with the Paris Agreement goals.

A global analysis of over 2,000 publicly listed companies across all industry sectors found that 98% have not disclosed plans to shift capital away from carbon-intensive assets or to align spending with their long-term decarbonisation goals.

The research was published by the TPI Global Climate Transition Centre at the London School of Economics and Political Science (LSE). It assessed companies that collectively represent US$87trn (£64trn) in market capitalisation and approximately three-quarters of total publicly listed equities worldwide.

Companies were assessed on two top-level indicators: management quality, which focuses on governance processes, and carbon performance, which benchmarks the emissions reduction targets of companies against Paris Agreement goals.

Almost all the companies assessed on management quality were found have a significant gap in transition planning and implementation. Most food producers were classified as level three, meaning they are integrating climate into operational decision making but only a handful are engaging in detailed transition planning and implementation (level five).

Carbon performance was similarly poor with only a small number of food producers found to be publishing suitable emissions and production data.

Across all sectors, the 554 companies that published sufficient data to be assessed on their carbon performance are “collectively set to overshoot their 1.5°C emissions intensity budget by 61% and their 2°C budget by 13% between 2020 and 2050”, according to the research.

Companies must cut emissions far more rapidly than they have in recent years to align with the Paris Agreement’s goals, with many currently relying on unproven technologies to meet their targets.

“At a time of increasing transition headwinds, rigorous and transparent analysis is more critical than ever,” said Ali Amin, policy fellow at the TPI Centre at LSE.

“Our analysis shows that companies are making some progress, but the vast majority remain off track for the Paris Agreement temperature goals. Companies need to accelerate emissions cuts and strengthen transition planning to give investors the confidence they need to invest.”