Most UK companies aren’t setting targets to cut their emissions, putting them on a collision course with increasingly strict climate regulations, according to a fresh study.

Some 64% of corporate emissions in Britain aren’t yet covered by targets, according to an analysis by Bain & Co. and nonprofit CDP published on Thursday.

“It is concerning that the majority of UK companies have yet to set and deliver on targets in line with the annual emissions reductions needed to align with a 1.5C pathway,” said Dexter Galvin, chief commercial and partnerships officer at CDP. “Especially given the various disclosure regulations already, or set to be, implemented across the globe that will have significant impacts on UK companies.”

Big UK companies have been required to disclose their climate footprint since April 2022. They’ll also be affected by new European sustainable reporting rules due to take effect next year, while a final version of the US Securities and Exchange Commission’s proposed climate disclosure rule is due later this year.

As UK companies fall short on reporting their emissions, there are also signs money managers are lagging behind. Britain’s pensions funds, for example, are “dramatically underestimating” climate risk, according to a separate report by The Economics of Energy Innovation and System Transition, a project led by the University of Exeter.

Corporate dithering may result in the UK falling even further behind in its national efforts to meet short-term net zero targets. The government targets a 68% reduction in emissions by 2030, from 1990 levels. It had achieved 46% by the end of last year, according to a report to parliament in June.

On average, UK companies have cut emissions by 8% since they began reporting through CDP. Companies in North America and Europe are even further behind, at just 4%, the study shows. The Bain-CDP analysis was based on data from about 1,450 UK-based companies, and the results would likely have been worse had more companies been included, according to the report.

The data suggests that companies doing more to decarbonize can generate significant financial value by becoming more resource efficient, or by developing new low-emission products and accessing new markets.

“Businesses which link decarbonization to value creation have targets underpinned by robust transition plans, and embed delivery into their operating model can generate significant upside,” said Katherine Kajzer-Hughes, a partner in Bain’s sustainability practice.