Just 4% of Top Companies Meet UN Climate Target Guidelines – Study

Companies Struggle to Meet UN Guidelines for Climate Targets

Half of the world’s 2,000 largest listed companies have set a goal to achieve net-zero emissions by mid-century. However, a recent report reveals that only a small fraction of these companies adhere to the United Nations’ stringent guidelines for high-quality climate pledges. The report, released by the independent data consortium Net Zero Tracker, highlights the challenges faced by corporations in meeting the criteria set by the UN’s Race to Zero campaign.

Increasing Targets, but Falling Short on Quality

According to the Net Zero Tracker report, the number of corporate targets from companies in the Forbes2000 index has surged by 40% to 1,003 in October 2023, compared to 702 in June 2022. These targets represent two-thirds of global revenues, amounting to a staggering $27 trillion. However, only 4% of these targets meet the stringent criteria established by the UN’s Race to Zero campaign.

Meeting the UN guidelines requires companies to address all emissions, initiate immediate emission reduction measures, and provide regular updates on progress towards interim and long-term targets. Unfortunately, the report reveals that a mere 37% of companies with climate targets include Scope 3 emissions, which encompass emissions throughout a company’s value chain. Additionally, only 13% of companies have established quality thresholds for the use of carbon offsets.

The Importance of COP28 Climate Talks

The pace of change among governments and corporations will take center stage at the upcoming COP28 climate talks in Dubai, starting in late November. These talks will address the pressing need for credible net-zero target setting and determine the commitment of companies and nations in tackling climate change.

Investing in a Sustainable Future

John Lang, Project Lead of the Net Zero Tracker, emphasizes the significance of credible net-zero target setting for forward-thinking companies. He questions whether the firms we invest in, work for, and buy from are on the right side of the line, demonstrating a commitment to a sustainable future.

Tracking Pledges Beyond Corporations

The Net Zero Tracker not only monitors corporate pledges but also tracks commitments made by nations, states, regions, and cities. By employing data analysis techniques, including machine learning and human expertise, the consortium provides a comprehensive view of climate action worldwide. Alongside Oxford Net Zero, the consortium includes The Energy & Climate Intelligence Unit (ECIU), Data-Driven EnviroLab (UNC), and the NewClimate Institute.

In conclusion, while a growing number of companies are setting net-zero targets, the majority fall short of meeting the rigorous guidelines outlined by the UN. The COP28 climate talks will serve as a crucial platform for addressing these gaps and accelerating the transition towards a sustainable future.