The number of the world’s largest companies to have set net-zero targets has almost doubled in two and a half years, according to recent research.
The number of companies on the Forbes Global 2000 list that have made climate pledges has increased from 417 in 2020 to 909 in 2023, according to the latest Net Zero Tracker report.
In the UK alone, the number of net-zero targets set has jumped by 60 per cent, from 37 in December 2020 to 61 firms this year.
The tracker is run by researchers associated with the Energy and Climate Intelligence Unit and the University of Oxford, among other organisations, and it was created to monitor the decarbonisation progress of companies, cities and countries around the world.
The team has warned that, while the number of targets set has soared, credibility gaps remain that could undermine progress towards net zero.
For example, only 4 per cent of the companies’ net-zero commitments globally meet the UN’s ‘Race to Zero’ campaign’s “starting line criteria”, which include conditions such as covering all greenhouse gases, clear conditions set for the use of offsets and a published plan.
Moreover, only 37 per cent of the targets fully cover emissions from the products a company sells and 13 per cent specify quality conditions under which any offsets would be used.
The researchers also warned that while 67 per cent of fossil fuel firms have net-zero commitments, an absence of oil and gas phase-out plans leaves those targets misaligned with the scientific and policy consensus.
The report added that no fossil fuel companies are making the necessary commitments to fully transition away from fossil fuel extraction or production, despite UN guidelines saying that net-zero targets must include “specific targets aimed at ending the use of and/or support for fossil fuel” in order to be credible.
“Expecting fossil fuel companies to go net zero might seem like asking turkeys to vote for Christmas,” said Dr Steve Smith, executive director of Oxford Net Zero and CO2RE. “But even in a fossil-free world we will need clean energy for all and companies sequestering residual carbon. People in fossil fuel companies have the skills to build the future.
“By falling prey to the status quo, companies are either delaying the net-zero transition or, maybe worse from their perspective, lagging behind on the industries of tomorrow and increasingly today.”
Alexis McGivern, net-zero standards manager at Oxford Net Zero, added: “Clear consensus has emerged on what is required for robust net-zero targets, which serves as a guiding star for both commitments and implementation.
“No company, city or region can any longer claim not to know what a credible target looks like,” he added. “Using the good practice and areas of consensus within the accountability ecosystem, policymakers now have the tools to shape regulation to create a level playing field enabling companies to accelerate down the pathways to net zero.”
In May this year, research revealed that the world’s listed companies are currently on course to exceed their carbon budgets, likely resulting in global warming of at least 2.7°C this century.
Despite new pledges, public companies were expected to emit 11.2 gigatonnes of direct greenhouse gas emissions into the atmosphere this year, the same as 2022, putting them on track to warm the planet by 2.7°C by the end of the century, the report said.
Last week, the UK was urged to levy a tax on millionaires and fossil fuel firms in order to increase contributions to a fund designed to alleviate the worst impacts of climate change in developing countries.
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