Disclosure rates rise while progress on target-setting falters, UCLA study finds

Emissions target setting among America’s largest companies shows limited signs of improvement — and one key metric has declined.

That’s according to researchers at the University of California, Los Angeles, who reviewed sustainability reports, climate transition plans and other material from 2023 for S&P 500 companies, which together make up around 80 percent of the value of the U.S. market. 

Looking up: Disclosure

Disclosure of Scopes 1 and 2 is becoming uniform and Scope 3, where disclosure rates have historically been much lower, is catching up.

But the headline number for Scope 3 hides inconsistent reporting across the 15 different categories of emissions that make up the scope.

The focus on business travel — Scope 3 Category 6 — is likely because the data is relatively easy to collect, suggested the UCLA team, which was led by Magali Delmas, a professor of management. “Category 6 represents just 12.5 percent of overall reported Scope 3 emissions,” the researchers noted, “highlighting a clear disconnect between ease of reporting and emissions significance.”

Going nowhere: Target setting

Disclosure is intended to be a first step toward setting and implementing targets for emissions reductions. And when it comes to net zero targets, progress on Scope 3 also remains solid, but movement on Scopes 1 and 2 has all but stalled.

Net zero commitments typically have a target year between 2040 and 2050. To ensure that companies do not delay taking action, standard setters such as the Science Based Targets initiative require companies to set interim goals, often for 2030. But the number of companies doing so declined between 2022 and 2023.

“This is worrisome,” the report noted, “as these near-term goals are crucial for tracking progress and identifying emission-reduction opportunities.”

The UCLA study is one of several from the past year to have looked at disclosure and target setting in the private sector, including a PwC survey, which painted a broadly positive of corporate action, and another from Accenture, which surfaced more mixed results. The results are not necessarily contradictory, in part because each study looked at a different sample of companies: PwC surveyed disclosures made by CDP by 7,000 companies and Accenture looked at the largest 2,000 companies by revenue.

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