A new report from the independent data consortium Net Zero Tracker has revealed that nearly half of all major listed companies have set net-zero targets, but only 4 percent of them meet UN guidelines. The report, produced in collaboration with organisations such as Oxford University and the Energy and Climate Intelligence Unit, highlights the need for these companies to enhance the credibility of their mitigation targets to align with the goals of the Paris Agreement.
The Paris Agreement, established in 2015, aims to limit the global temperature increase to 1.5°C above pre-industrial levels. While over 40 percent of relevant firms have set net-zero targets, the report emphasises that these targets must be credible and aligned with the Paris Agreement’s objectives.
John Lang, project lead at Net Zero Tracker, noted that many net-zero targets lack credibility, but the report helps identify which major companies are on the right track regarding their net-zero commitments. The report questions whether the companies people invest in, work for, or purchase from are on the right side of the net-zero commitment.
A closer examination of the companies with net-zero targets reveals that only 37 percent of them include Scope 3 emissions, which are linked to a corporation’s value chain. Additionally, just 13 percent establish quality standards for the use of carbon offsets.
This report comes on the heels of warnings from the International Energy Agency (IEA) in October, emphasising the need for stronger energy policies to limit global warming. The IEA also warned that without significant global policy changes, the global temperature could rise by 2.4 degrees Celsius this century. The agency expects the share of fossil fuels in the global energy supply to decline from 80 percent to 73 percent by 2030.