Companies are getting better at “talking the talk” of net zero, but they’re not doing nearly as well in “walking the walk,” according to a recent analysis by business consultant Accenture.
The corporate net zero movement got rolling in earnest almost three years ago in the run-up to a major international climate summit in Glasgow, Scotland. The Glasgow Financial Alliance for Net Zero (GFANZ) used the summit, known as COP26, to encourage companies to adopt net zero targets — deadlines by which time they would cut their greenhouse gas emissions down and offset remaining emissions by enabling reductions elsewhere through carbon credits.
Most chose 2050 as their target date, in line with the larger United Nations framework guiding global decarbonization efforts.
The initiative has traveled a bumpy road since then. Many companies signed up, but it quickly became clear that without near term goals, better measurement and restrictions on offsets, the promises would amount to little. They could even be counter-productive if emissions weren’t credibly offset, a problem that quickly emerged.
In an update before this year’s COP28 climate summit, which is underway in Dubai this week, Accenture looked at the 2,000 largest companies by revenue globally. They found the share of companies setting targets continues to grow, especially in Europe, with 37% globally now committing to achieving net zero emissions. And companies with targets are cutting emissions faster than companies without targets, they found.
But among companies that have made the commitment and have disclosed emissions data since 2016, half continue to increase their emissions, a third are cutting emissions but not fast enough to meet their targets and only 18% are actually on track to meet their 2050 targets.
To limit global warming to 1.5 degrees Celsius, the stretch goal the world has adopted, emissions must peak no later than 2025 and decline by 43% by 2030, Accenture noted.