Many of the largest companies face major gaps in credibility when it comes to their net-zero plans, according to a recent study by Net Zero Tracker.
The analysis draws upon the Net Zero Tracker database, which contains over 4,000 entities consisting of cities, corporations, regions, and nations.
The analysis shows that most countries have now defined a path to net-zero, with 91% of global GDP now covered by national government net-zero targets, an increase of 23% since December 2020. This means that 80% of the global population is now covered by net-zero targets.
While the report provides optimistic news for strategies on the country-level, the story is less positive when discussing corporate and sub-national government net-zero strategies.
The study found that more than one-third (702) of the world’s largest companies now have net-zero targets, an increase from one-fifth (417) as reported at the end of 2020. However, 65% of those corporate targets don’t meet the minimum procedural reporting standards.
Dr Steve Smith, Executive Director, Oxford Net Zero, said: “We’re seeing a proliferation of companies setting superficial targets due to growing peer pressure. This trend at least puts more firms on an escalator towards integrity, but until their targets improve to reflect the urgency of the climate emergency, they leave themselves wide open to criticism.
Out of the 700+ corporate targets, about half are embedded in the companies’ corporate strategy documents or annual reports, while the rest have only announced their intention to achieve net-zero targets.
The severe disruption to global fossil fuel supplies due to the Russian invasion demands that countries rapidly cut their dependency.
Additionally, 60% of companies that reported on coverage of their emissions either only partially cover or do not cover their Scope 3 (indirectly generated) emissions at all.
Interestingly, the Fossil Fuels industry has the second-highest percentage of net-zero targets (49%) among those industries with more than ten companies in the Forbes 2000 list. The third and fourth-highest percentages on the list are also found in greenhouse gas intensive industries: the Materials industry (e.g., steel and cement) and Transportation Services (e.g. airlines and shipping). The results suggest that companies with high emissions footprints and a reputation to consider are more likely to set symbolic net-zero targets without the detailed plans required to achieve them.
The study also found that 40% of city targets (94 / 235 cities), which represent around 36% of the total population covered by all cities’ net-zero targets, lack interim targets – or published planning documents which are essential to successfully executing on net-zero targets.
“Ambitious interim targets are vital to delivering net-zero and limiting cumulative emissions.” says Richard Black, Senior Associate, Energy & Climate Change Intelligence Unit (ECIU). “But even leaving aside the climate emergency, the severe disruption to global fossil fuel supplies due to the Russian invasion demands that countries rapidly cut their dependency.
UN Secretary General, António Guterres, recently launched the High-level Expert Group to “develop stronger and clearer standards” for net-zero emissions pledges by non-state actors, including businesses, investors, cities and regions, to accelerate implementation.
You can watch the presentation for the report from the Bonn Climate Conference below:
