(Credit: Pixabay)More than 70% of the world’s largest corporations have made net-zero targets, but concrete long-term strategies and Scope 3 emissions remain a hindrance as businesses work toward international carbon neutrality, a report from EcoAct finds.
EcoAct says in its 12th analysis of corporate climate reporting performance that early action for carbon reduction is necessary to reach sustainability targets, and such work also can be a commercial advantage for large corporations. That said, clear strategies are meaningless without verifiable emissions reductions, according to EcoAct.
The report analyses how top companies throughout the world, and across industries, are doing with their emissions work and net-zero responses. It scored them based on emissions measurement and reporting; ambition and emissions reduction targets; strategy, governance, and action plans; and achievements.
Measurement and reporting received the highest scores among the 119 companies studied, with government strategies and action plans following. Commitment and achievement scores were below 30% overall.
Telefónica, Sanofi, E.ON, Cisco, and GSK were the top five corporate performers, according to the analysis.
Thousands of companies and organizations are a part of the United Nations’ Race to Zero program. Yet, EcoAct says, there is a near absence of long-term emissions reduction targets. Additionally, the report finds any emissions goals are not aligned with science, despite growth in involvement in plans like the Science-based Targets initiative (SBTi).
Last year, the SBTi released a new standard for corporations to achieve net zero. According to that, net zero cannot be realized without at least a 90% emissions reduction across all scopes, and the remaining residuals must be offset through carbon removals and not exceed 10% of a company’s total emissions.
Of the companies studied, 8% have science-based validation of Scope 3 emissions reductions, according to the report, suggesting the impact of the supply chain is not being addressed. With a lack of Scope 3 targets, in which the World Economic Forum says a handful of supply chains account for half of the total emissions, and not enough science-based alignment, net-zero goals are in danger of not being met, the report finds.
EcoAct says 34% of large companies have short-term Scope 3 goals, but just four companies in its study have a long-term Scope 3 reduction target. The report recognizes that companies can have limited control over their Scope 3 emissions and that gathering data and setting standards throughout their operations can be a challenge.
The study also finds that some of the progress shown in the 2021 report fell off in the past year. It attributes that to better results likely attributed to COVID-19 slowdowns. In 2021, 74% of companies achieved Scope 1 and 2 emissions reductions, but that number fell to 43% in the latest report. However, companies did make progress in Scope 3 emissions, with 29% achieving reductions compared with 17% in 2021.
Technology industries performed the best in the study, with information technology and telecommunications and internet and data services scoring at the top. Personal care, utilities, and biopharmaceuticals followed. Healthcare and hospitality services and home improvement retail had the most work to do.
Companies that rounded out the top 10 of EcoAct’s reporting results are Microsoft, Schneider Electric, Eni, AstraZeneca, and Nike.
