The Net Zero Tracker report, released today (12 June), revealed that the world’s largest corporations are only making nominal progress towards their climate targets, as well as missing targets entirely. The Tracker report analyses targets set by nations, cities, and publicly listed companies, including those from the Forbes Global 2000 list.

Integrity of carbon targets called into question

The report’s key findings highlight the lack of integrity of carbon targets. Of the 2,000 listed companies, 929 have implemented net zero goals but “grave concerns” still remain over the strength of set targets: Only 4% align with the requirements of the UN-backed Race to Zero campaign. These requirements include having an investment plan and SBTs for 2030, and avoiding dependence on carbon offsetting.

Thirty-seven percent of the listed companies, which make up some of the largest in the world, still do not have any kind of public emissions reduction objectives in place, including more than half of the largest US companies and just over a fifth of the largest EU corporations. The report’s findings point to the fact that only a small fragment of listed companies are complying with UN net zero standards.

“We find that the overall robustness of companies’ net zero targets remains low and collective progress too slow,” summarised report co-author Dr. Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute.

According to the report, over a quarter of the 2,000 companies analysed are also exploring using CO2 removals to help meet their net zero goals – a point of controversy within the energy sector. Earlier this year, an investor group worth $11trn in assets prohibited its members from counting carbon removal programmes towards emissions reduction targets.

No end in sight for fossil fuel

The Net Zero Tracker showed that 75 of the world’s biggest coal, oil, and gas firms have publicly announced their net zero targets. This is up from 52 in summer 2022, but none of the set targets fully cover Scope 3 emissions, which make up a major part of a company’s environmental impact.

All 114 listed coal, oil, and gas firms failed to set an end date on fossil fuel consumption. The Tracker team has concluded that net-zero targets in this industry are “largely meaningless”.

Report co-author Dr Steve Smith, executive director of Oxford Net-Zero, said: “Expecting fossil fuel companies to go net zero might seem like asking turkeys to vote for Christmas. But even in a fossil-free world we will need clean energy for all and the ability to sequester residual carbon. People in fossil fuel companies have the skills to build the future. By falling prey to the status quo, these companies are either delaying the net-zero transition or losing out on the industries of tomorrow and increasingly today.”

While the journey to net zero presents many challenges, by aligning strategies with ambitious climate targets businesses can gain a competitive advantage, attract responsible investors, and ensure long-term resilience in an increasingly carbon-constrained world.

For advice on your net zero journey and energy consumption, get in touch with one of our experts at Sustainable Energy First