Corporate Net-Zero Commitments Surge: Half of the world’s largest 2,000 publicly listed companies have committed to achieving net-zero emissions by mid-century, according to a report released on Monday. However, the report, produced by the independent data consortium Net Zero Tracker, including Oxford University, revealed that only a small fraction of these companies meet the stringent guidelines set by the United Nations for a high-quality net-zero commitment.
In October 2023, corporate targets from companies in the Forbes2000 index increased by 40% to 1,003, up from 702 in June 2022. These targets represent about two-thirds of global revenues, amounting to approximately $27 trillion. But here’s the catch: just 4% of these commitments meet the criteria established by the U.N.’s Race to Zero campaign. These criteria include covering all emissions, initiating immediate emissions reductions, and providing regular updates on progress toward both short-term and long-term goals.
Among the companies that have set net-zero targets, only 37% of them encompass their Scope 3 emissions, which are tied to a company’s value chain. A mere 13% have established quality thresholds for the use of carbon offsets.
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The rapid evolution in commitments from governments and corporations is expected to be a central topic at the COP28 climate talks set to begin in Dubai later this month.
John Lang, Project Lead at the Net Zero Tracker, highlighted the significance of this development, stating, “A clear line in the sand on net zero has surfaced. Countless net zero targets are credibility light, but now we can say for certain that most of the world’s largest listed companies are on the right side of the line on net zero intent.” He posed a fundamental question: “Are the firms were investing in, working for, and buying from on the right or wrong side of the line?”
The Net Zero Tracker, in addition to monitoring corporate commitments, also tracks pledges made by nations, states, regions, and cities, using both machine and human data analysis. This consortium includes organizations such as The Energy & Climate Intelligence Unit (ECIU), Data-Driven EnviroLab (UNC), and the NewClimate Institute, alongside Oxford Net Zero.
Our Reader’s Queries
How many companies are making net zero commitments?
According to Net Zero Tracker, a group that monitors corporate commitments, 50% of the world’s largest 2,000 publicly listed companies have set a net zero target. Over the last 16 months, the number of companies with such goals has increased by 40%, from 702 in June 2022 to 1,003 in October 2023.
What are net zero challenges for companies?
Achieving Net Zero is no easy feat. It requires creating resilient nature markets, implementing carbon capture technologies, setting science-based targets, and addressing social and political realities. These challenges demand innovative solutions and a collective effort from all stakeholders. However, with determination and a commitment to sustainability, we can overcome these obstacles and pave the way towards a greener future.
What is a net zero commitment?
Net zero refers to the process of reducing greenhouse gas emissions to the lowest possible level and then re-absorbing any remaining emissions from the atmosphere through natural means such as oceans and forests. This approach aims to achieve a balance between the amount of emissions produced and the amount that is removed from the environment. In essence, net zero is a critical step towards mitigating the effects of climate change and preserving our planet for future generations.
What is the net zero strategy for companies?
To achieve a net-zero strategy with science-based targets, companies must prioritize reducing emissions rather than relying on carbon offsets. It’s crucial for companies to be transparent about their plans to reduce emissions and have a clear pathway to replicate and diffuse success throughout their value chain. By doing so, companies can effectively reduce their carbon footprint and contribute to a more sustainable future.