Many companies have set net zero commitments, but most do not have satisfactory actionable plans. That’s the conclusion of a recent assessment from Climate Action 100+, which reveals 9 out of 10 companies lack sufficient short-term emissions targets. What does this tell us about the current mindset towards reaching net zero?
The survey
Climate Action 100+, the world’s largest investor engagement initiative on climate change, released an interim set of Net Zero Company Benchmark assessments of its 159 focus companies. Feedback from the survey is aimed at helping to improve alignment with corporate reporting and the goals of the Paris Agreement.
The results
While many companies made a verbal commitment to progressing towards net zero, the action plans fall short – if there are any at all.
75% of focus companies committed to achieving net zero emissions by 2050, but only 20% had established ambitious medium-term targets that cover all material scopes and are aligned with a 1.5C pathway. Only 10% of focus companies set short-term targets up to 2025 that cover all material emissions are aligned with a 1.5C scenario.
While intentions might be good, the results suggest that actionable implementation and delivery of net zero strategies are insufficient. Although 54% of companies have a decarbonisation strategy in place to reduce their GHG emissions, only 19% of companies quantify key elements of their emissions.
Another topic focused on Scope 3 emissions. While this complex subject is tough to measure, it remained entirely absent in 49% of company comprehensive commitments.
Industry reports
Less than one third (8 out of 32) of electric utility focus companies have a coal phase-out plan consistent with limiting global warming to below 2°C (not 1.5°C), according to Carbon Tracker Initiative (CTI) data. This is unchanged from the March 2022 Benchmark.
No change was visible for oil and gas focus companies. Almost two thirds (61%) sanctioned projects are inconsistent with limiting global warming to below 2°C (not 1.5°C) in 2021, finds CTI.
The current chair of the global Climate Action 100+ Steering Committee, Andrew Gray said, “Through Climate Action 100+, investors have helped many heavy emitting companies make progress on transitioning to net zero but, as these assessments show, that progress needs to accelerate. Companies need credible strategies and capital expenditure plans to deliver on their net zero targets.”