Large UK-listed firms are unlikely to decarbonise fast enough to meet global climate targets, leaving the economy exposed to a disorderly transition and heightened risk, a new report suggests.

The study, carried out by the University of Exeter and J O Hambro Capital Management, was based on a probabilistic forecasting tool that models actual emissions from 347 companies representing 89% of the UK market.

Based solely on verified scope 1 and 2 emissions, the model projects a plateau until 2032, followed by a decline from 350m tonnes of CO₂ (equivalent to around 115m) by 2050. Despite progress, this falls short of the pathway needed to limit warming to 1.5°C.

“This puts the UK on a disorderly trajectory, with increased economic and systemic risks,” said Nikolaos Dimakis, senior data scientist at J O Hambro. “Three sectors – energy minerals, process industries and transportation – account for 88% of total emissions. Some 88.7% of that is generated overseas, underscoring the global footprint and exposure of UK business.”

The report maps emissions pathways to a range of climate scenarios – from orderly transition to 'hot house world' – and highlights cost implications linked to climate tipping points, rising physical losses and adaptation demands.

“The gap between current trends and net-zero ambition is especially concerning,” said Dr Jesse Abrams, of Exeter’s Green Futures Solutions team. “Delaying mitigation increases long-term cost and risk. Proactive investment can avoid future damage and open up new markets.”

While the UK has already halved its onshore emissions since 1990 – driven largely by renewables – the report suggests this masks a lack of transformation in carbon-intensive sectors and global value chains.

The findings call for stronger disclosure standards and greater scrutiny of firms’ transition plans, prioritising measurable progress over stated ambition.

The Horizon forecasting model does not factor in net-zero pledges, focusing instead on observed emissions trends. Scope 3 was excluded due to inconsistent and unreliable data, though researchers warned these often represent the bulk of a company’s footprint and require urgent regulatory attention.

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