Net Zero Targets Still Not Set by a Third of Global Firms, Research Shows

A third of the world’s largest public-listed companies are still yet to set an emissions reduction target, according to a new report from Net Zero Tracker.

The tracker, the world’s only open-source independent review in terms of quality and quantity, has assessed the 1,000th company with a net zero target. The companies come from the Forbes Global 2,000 list of the largest global publicly-listed firms.

National climate commitments, which account for 92 per cent of the global economy, cover 88 per cent of global GHG emissions, and corporate net zero targets have increased by more than 40 per cent since June 2022.

What is the Net Zero Tracker?

Net Zero Tracker (NZT) is an independent research consortium and comprises a comprehensive and up-to-date database of net zero commitments made by nations, states and regions, cities and major companies, to reach a net zero greenhouse gas (GHG) emissions milestone by 2050.

The four organisations making up NZT are The Energy & Climate Intelligence Unit (ECIU), Data-Driven EnviroLab (UNC), NewClimate Institute and Oxford Net Zero.

The NZT looked at the quantity of net zero targets set by UK companies where a recent policy review hindered plans to implement net zero goals. Despite this, 94 per cent of UK-based companies included in the Forbes list have already set net-zero targets.

This reinforces what we have seen in our new sustainability census report, which will be made publicly available over the coming weeks. It highlighted that 70 per cent of respondents affirmed their UK organisations have publicly pledged to prioritise sustainability.

What are the expert opinions on setting and reaching net zero targets?

John Lang, Project Lead, the Net Zero Tracker (ECIU), said: “A clear line in the sand on net zero has surfaced. Countless net zero targets are credibility light, but now we can say for certain that most of the world’s largest companies have shifted to the right side of the line on net zero intent.

“With credible net zero targets setting a proxy for forward-thinking, future-proofing companies, it begs a simple question: are the firms we’re investing in, working for and buying from on the right or wrong side of the line?”

The Rt Hon Chris Skidmore MP, chairman of the UK Net Zero Review, said: “Having signed net zero into law four years ago, it’s remarkable that such progress has been made. However, the recent stop-start approach to policy is putting business investment at risk and undermining investor confidence.

“Now is the time for the UK to press this advantage by accelerating policies to support the engines of our economy to deliver on net zero.”

The integrity of corporate goals must urgently improve, however, according to NZT, if they are to align with the Paris Agreement’s temperature targets.

According to the last Net Zero Stocktake, published in the summer, just 37 per cent of corporate net zero targets fully cover Scope 3 emissions on a self-reporting basis. This is compared to a mere four per cent of company net zero commitments meeting the revised ‘Starting Line criteria’ (such as implementing immediate emission-cutting measures) as set out by the UN Race to Zero campaign.

Natasha Lutz, Co-Data Lead, Net Zero Tracker (University of Oxford), said: “Net zero commitments can provide a useful framework to guide companies, including their value chains and investors, through an orderly, efficient transition – but only if commitments are set with robustness and transparency.

“Weaker targets hinder companies’ ability to implement effective emissions reductions, and cause greater exposure to climate and reputational risk, and stakeholder mistrust.”

Peter Chalkley, Director of the Energy and Climate Intelligence Unit (ECIU), said: “We know that mixed signals from the UK Government over net zero have spooked investors and businesses who are looking at where to make their investments.

“With the US powering ahead with the Inflation Reduction Act driving the construction of new EV plants and battery factories, the question for the UK Government is how will it respond? All eyes are on the autumn statement.”

The NZT will launch its 7th analysis of global net zero pledges at COP28, which is currently running in Dubai until 12th December.

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