Climate Action 100+ (CA100) has released an assessment of the largest greenhouse gas (GHG) polluting companies for progress against its Net-Zero Company Benchmark. The steering committee of CA100, a global investor coalition that has grown to more than 540 investors managing more than $52 trillion in assets under management, developed the Net-Zero Benchmark as a tool to assess company alignment with the Paris Climate Agreement.
The analysis concludes that less than 25% of the CA100 focus companies have an ambition to achieve net-zero emissions across their full carbon footprint by 2050 or earlier, a key indicator demonstrating that a company is aligned with the Paris Agreement’s 1.5-degrees Celsius goal. Other indicators used by CA100 to rate companies’ climate progress include disclosure of: long-, medium-, and short-term GHG reduction targets; a decarbonization strategy to meet such targets; aligned capital allocations; aligned lobbying statements and actions; incorporation of climate into governance structures, including executive compensation; and alignment with the Taskforce for Climate-related Financial Disclosures guidelines.
CA100 notes the following:
Alignment of value chain GHG (Scope 3) emissions often remain a blind spot.
Overall, 83 of the focus companies (52 % of the total) assessed have announced an ambition to achieve net-zero by 2050 or sooner. However, roughly half of these commitments (44) do not cover the full scope of the companies’ most material emissions.
Long-term ambitions need to be backed by clearer strategies and robust short- and medium-term targets.
— There is a critically important need for corporates to establish more robust short- and medium-term targets to achieve their ambitions;
— While 107 companies have set medium-term targets (2026-2035), only 21 meet all assessment criteria; 75 companies have set short-term targets (up to 2025), but only eight meet all assessment criteria.
Future investments need to be more clearly aligned with the net zero transition.
Only six companies explicitly commit to aligning their future capital expenditures with their long-term emissions reduction target(s), and none of these companies has committed to aligning future capital expenditure with the goal of limiting temperature rise to 1.5 degrees Celsius.
Corporate boards and executive management teams need to improve climate change governance.
139 focus companies assessed (87%) have board-level oversight of climate change, but only a third of companies tie ‘executive remuneration directly to the company’s emission reduction targets.
Ambitious 1.5-degree pathways are often missing from climate scenario planning.
Almost three quarters (72% of the total) of companies assessed commit to align their disclosures with the Task Force for Climate-related Financial Disclosures (TCFD) recommendations and/or support the recommendations. However, only 10% use climate-scenario planning that includes the 1.5-degrees Celsius scenario and encompasses the entire company.
The net-zero company benchmark assessments for various companies can be found here.