More than a third of the world’s largest publicly traded companies now have net zero targets, up from one-fifth in December 2020, according to a global stocktake of net zero commitments from the Net Zero Tracker initiative.
And at a national level, 80 per cent of the global population now lives in a country with a national net zero target, while 91 per cent of global GDP is covered by national government net zero targets, up sharply from 68 per cent in December 2020 .
Moreover, national government net zero targets cover at least 83 per cent of global greenhouse gas emissions, up from 61 per cent in December 2020.
Richard Black, senior associate at the Energy & Climate Change Intelligence Unit (ECIU), one of the organizations behind the Net Zero Tracker initiative, mounting geopolitical tensions are providing impetus for governments to now deliver on their decarbonisation goals.
“Ambitious interim targets are vital to delivering net zero and limiting cumulative emissions,” he said. “But even leaving aside the climate emergency, the severe disruption to global fossil fuel supplies due to the Russian invasion demands that countries rapidly cut their dependency.”
As countries continue to set and strengthen net zero goals, the analysts said the spotlight would inevitably fall on the handful of governments that are yet to set net zero targets, as well as the two thirds of listed companies, 84 per cent of regional governments, and 80 per cent of cities globally that are yet to announce net zero targets.
Moreover, the research highlights how those organizations that do have net zero goals in place are facing ever more demanding questions about the credibility of their targets and their plans to deliver on them. The analysis, which draws upon the Net Zero Tracker’s database of over 4,000 business, cities, and countries, highlights that 65 per cent of corporate targets still do not yet meet minimum procedural reporting standards.
As such, the researchers described the volume and robustness of targets set by non-state actors as “alarmingly weak” and predicted they were bound to face increasing scrutiny as UN, national, and NGO-led accountability initiatives ramp up.
UN Secretary General, António Guterres, recently launched the High-level Expert Group to “develop stronger and clearer standards” for net zero emissions pledges by non-state actors, including businesses, investors, cities and regions, to accelerate efforts. Meanwhile, regulators in the EU and US are moving to strengthen corporate climate risk disclosure rules, which are expected to increase pressure on listed firms to come forward with credible net zero plans.
Dr Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute, which also works on the Net Zero Tracker, said the global net zero movement had reached a critical point in its development.
“We are now at a watershed moment where peer pressure to hastily set net zero pledges, especially in the business sector, could result in either a mass flow of greenwashing — or a fundamental shift towards decarbonisation,” he said. “Those companies, cities, and states without a target will likely start to look like the odd ones out and those with targets must expect deeper scrutiny of their pledges.”
About half of the 702 corporate targets outlined in the report are embedded in companies’ corporate strategy documents or annual reports, while most other companies have simply announced a net zero target or an intention to set such a target. Sixty per cent of companies assessed by the report only partially cover or do not cover their Scope 3 value chain emissions at all, while just 38 per cent of companies claim to cover all Scope 3 emissions.
“Science-based net zero pathways are now the baseline expectation for countries, companies, cities, and regions,” said Dr Thomas Hale, associate professor at the Blavatnik School of Government at the University of Oxford. “It’s insane that-thirds of the largest companies have yet to set a target for a transition that is well underway. But given a third now have – and that has grown substantially – the glaring omissions raise the question of whether boards and management are doing their jobs.”
The report noted how a significant percentage of fossil fuel, materials, and transport companies had net zero targets in place. But the analysts warned there was a risk that reputation-conscious companies with large emissions footprints are more likely to set net zero targets that are symbolic in nature, without the detailed plans required to achieve them. “Or at worst, they are flat-out greenwashing,” the Net Zero Tracker team noted.
Similarly, the report found that while the volume of city net zero targets has doubled – from 115 to 235 in the past year – just 40 per cent of city net zero targets are enshrined in domestic legislation or policy documents. Forty per cent of city targets also lack interim targets – or published planning documents – which are seen as vital for the transparent evaluation of progress over the next eight years through to 2030.
“The growth of net zero targets has provided a governance framework of scale and scope – carving out an achievable path to global decarbonisation,” said Frederic Hans, climate policy analyst at NewClimate Institute and the report co-lead. “But our analysis clearly shows major flaws in current net zero target-setting practice across all entities.”
The Net Zero Tracker is produced by a consortium comprising the NewClimate Institute, ECIU, Oxford Net Zero, and Data-Driven EnviroLab.