Most corporate net-zero targets don’t go nearly far enough, analysis finds

Nearly 60 percent of 1,977 publicly traded companies followed by the Net Zero Tracker have pledged to reach net zero by 2050, but a vast majority of those commitments need to be stronger, according to an annual review of commitments. 

The Net Zero Stocktake 2024 report, published Sept. 23, is based on a database maintained by a consortium of research organizations: Data-Driven EnviroLab, the Energy & Climate Intelligence Unit, NewClimate Institute and Oxford Net Zero. The database follows Forbes Global 2000 companies as of 2020, along with 100 of the world’s biggest private businesses. The tracker also follows pledges by cities, states, regions and countries. 

The number of new corporate commitments plateaued in North America and Europe in the past year but accelerated in Asia, said Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute. That tracks with separate data released by the Science Based Targets initiative, which noted a big uptick in Japanese companies setting science-based targets.

Pledges lack ‘integrity’

When it comes to actual ambitions, only half of corporate net-zero targets cover all greenhouse gases and all emissions scopes, Kuramochi said. What’s more, just 5 percent, or 61 companies, meet all minimum requirements for “integrity,” a measure of their quality. 

Among criteria the researchers use to judge integrity:

• The net-zero pledge aligns with emissions reductions that would hold temperature below 1.5 degrees Celsius of warming.
• It includes interim targets for 2025, 2030 and 2035.
• Scope 3 emissions from the company’s supply chain are covered.
• Carbon offsets are screened for additionality (whether the purchase would have happened without the company’s support) and permanence (how long the CO2 is stored); they are used only as a last resort, not toward interim targets.
• Whether companies (or other actors) align policy advocacy and lobbying toward action that mitigates climate changer rather than exacerbates it.

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Google, Volvo Group among standouts

Two companies that follow many of the best practices advocated by the Net Zero Tracker researchers are tech company Google and heavy-duty vehicle maker Volvo Group. “First movers provide valuable lessons,” said Frederic Hans, senior climate policy adviser with NewClimate. “Others can follow suit and learn from this. This is a really important mechanism.” 

Some things the two do right, according to the researchers:

‘Good practice’ followed

• Google: A forward-thinking approach to residual carbon removal for its 2050 target year; a 2024 announcement that it will stop claiming “carbon neutrality” by buying carbon credits; and purchases of carbon-free energy.
• Volvo Group: Transparent interim targets that appear well on track; plans to source 10 percent of aluminum and steel from low-carbon sources by 2030; and engagement on high-level climate policy. 

Room for improvement

• Google: No interim target for 2025; limited “granularity” of greenhouse gas emissions data on Scope 3 sources; and plans to offset 67 percent of its emissions by 2030. 
• Volvo Group: Doesn’t include upstream Scope 3 emissions in interim targets; will continue to sell vehicles with internal combustion engines until 2040; and negative policy positions on key truck-related emissions standards in the U.S. and European Union.

Companies, countries still opt out

The researchers urged more action at the subnational level and corporate level. 40 percent of these entities have yet to set any emissions reduction targets, which will make it more difficult for countries to achieve their own goals, said John Lang, lead on the Net Zero Tracker for the Energy and Climate Intelligence Unit.

About 500 companies followed by the Net Zero Tracker don’t have any sort of net-zero target, including half of the private ones in the database.

Holdouts include the world’s largest seller of electric cars, BYD; rental car company Hertz; video-game company Nintendo; and Warren Buffett’s conglomerate, Berkshire Hathaway.

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