The proportion of the global economy represented by companies that have set, or committed to set science-based targets reached 34% by market capitalisation in 2022, according to a new report.
The SBTi Monitoring Report, which is the fourth to be published, outlines the key trends in companies and financial institutions setting science-based targets in 2022, together with the SBTi’s major updates and publications during the year.
According to the report, there was a significant increase in the number of companies setting science-based targets, with 1,097 companies having their targets validated, despite an increasingly challenging global backdrop. This increase represented more than the total of the previous seven years combined.
“I am hugely proud of the fact that more companies and financial institutions set science-based targets in 2022 than in the previous seven years combined,” said Luiz Fernando do Amaral, Chief Executive Officer, Science Based Targets Initiative.
“I am also pleased to see some companies exerting more pressure on their suppliers, creating a cascade of science-based requirements across the global economy, which in turn is under more and more pressure to decarbonise.”
By the end of last year, the proportion of the global economy committed to science-based targets reached over a third (34%), compared with 28% by the end of the previous year. However, the report remarks that as overall stock market values fell during this time, there was a lower absolute value of market capitalisation covered by science-based targets.
In 2022, companies could have their targets validated against the SBTi’s Corporate Net-Zero Standard for the first time. This standard is the SBTi’s most ambitious level of decarbonisation, requiring companies to also tackle scope 3 emissions alongside scope 1 and 2. Last year, 130 organisations set net zero targets, representing 12% of all science-based targets set that year.
According to the report, Japan saw the highest number of companies setting targets in 2022 at 201, followed by the United Kingdom (181) and the United States (109).
While the EU saw the highest number of commitments (1,147), the report makes special note of Asia, which saw the greatest proportional growth in companies setting targets at 317, representing a 127% increase from the year before.
Five countries – Albania, Malta, Myanmar, Romania, and Tunisia – also saw companies set validated science-based targets for the first time. Meanwhile, companies from five other countries – Argentina, Liechtenstein, Morocco, Sierra Leone, and Trinidad and Tobago – committed to setting science-based targets for the first time.
By the end of the year, there were companies with validated science-based targets in 61 countries, with companies in a further 16 countries having committed to setting targets
“Our work here is only just beginning, but with science guiding the way, perhaps all of that hard work and innovation can go a little further in helping to avoid the very worst effects of climate change” said Amaral.
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