A rising number of companies around the world are announcing commitments to cut greenhouse gas emissions to reach "net-zero" as part of an effort to address climate change, but those pledges are rarely backed up by a credible plan according to a new report.
The "Net Zero Stocktake 2023" report was prepared by the Energy and Climate Intelligence Unit at the University of North Carolina’s Data-Driven EnviroLab, the NewClimate Institute and Oxford Net Zero. It found that the criteria for net-zero targets set by companies and sub-national governments aren’t clearly defined and less than 5% of those examined were given passing marks in terms of having credible plans.
"We find that entities are not, overall, implementing measures of integrity as quickly as might be expected. More than 1,000 set their net zero targets over a year ago, and have therefore had time to prepare robust strategies for reducing emissions," the report authors wrote. "Leaning on the Race to Zero’s latest version of its ‘starting line criteria’ — a minimum threshold that is necessary but by no means sufficient — we found that fewer than 5% of net zero targets set by sub-national governments and companies met this procedural bar."
Within the starting line criteria, the report’s authors considered whether companies set interim targets for reducing greenhouse gas emissions and considered all the emissions they are responsible for, including those connected to the use of their products by consumers.
The number of publicly listed companies with published net-zero goals has risen from 417 in late 2020 to 929, including many of the largest companies. The report noted that nearly half of the world’s largest listed companies have net-zero targets and that the 929 with established targets represent 65% of the total annual revenue of the 1,986 companies tracked in their database.
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Several sectors stood out in the report in terms of not having emission reduction targets — just 44% of biotech, healthcare and pharmaceutical companies, 46% of infrastructure firms and 26% of retail companies lacked any emission reduction target.
Those sectors were among the worst-performing sectors in terms of target setting. Whereas 71% of power generation and 67% of fossil fuel companies had targets.
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The report also found disparities between U.S. companies and their European counterparts in terms of setting emissions reduction targets. Among the U.S. companies tracked, about 49% had targets in place compared to 79% of EU companies.
"You can see cities talking about net zero, companies talking about net zero. And if you go to supermarkets, you see climate-neutral or carbon-neutral products," said Takeshi Kuramochi, one of the report’s authors. "But then you don’t know what exactly they mean and whether they’re really contributing to this transition to global net-zero emissions."
The Associated Press contributed to this report.
