(Credit: Pixabay)More of the world’s largest companies have committed to making business changes relating to net zero, carbon neutrality and science-based targets, according to a new report by Natural Capital Partners, but with an investment by those organizations that haven’t made a significant effort toward transitions more impact can be done to reduce emissions.
The report finds that 38% of the Fortune Global 500 companies have made a significant 2030 target, which is up 8% from the previous year. Still, if the Fortune Global 500, which are worth nearly $32 trillion in revenue, invests 0.5% of that into sustainability goals it could add $158 billion to carbon reduction efforts, Natural Capital Partners says.
Investment in sustainability efforts is increasing, even estimated that there will be double-digit increases in spending in 2022. Of the businesses analyzed for the report, there has been a 50% increase in those that have reached carbon neutrality or plan to do so by 2030.
There has also been a 25% increase in both science-based targets and net zero efforts. The latter saw a three-fold increase from 2020, according to the report, although the majority of those goals are set for after 2030.
Science-based targets are becoming a foundation that many businesses are using to make changes. In the fall of 2021 financial institutions worth more than $29.3 trillion called on more than 1,600 businesses to set emissions reductions goals based on the targets. The Science-based Targets Initiative also introduced more ambitions goals with its Net-Zero Corporate Standard.
The Natural Capital Partners report also finds that of the companies that have made these commitments, many are approaching net zero and carbon neutrality efforts together. Of those with a net zero goal, 86% of them are for after 2030, but one third of those with such a target either already are carbon neutral or have an immediate carbon neutrality goal.
The Natural Capital Partners considers 20% of the net zero targets to not be aligned with an emerging consensus of how net zero is defined and views those as closer to carbon neutrality targets because they don’t cover value chain emissions. Additionally, the report says 24% of the net zero targets are leadership targets, in that they align more with policy regulations and national targets as opposed to targets the organizations made individually.
Of milestones that have been achieved, carbon neutrality leads the way with milestones hit to date with 59% of the businesses hitting a goal. Science-based targets lead the way for milestones projected to be hit by 2030, also at 59%, and 55% of the companies will hit net zero objectives beyond 2030.
The report also finds that companies with net zero and carbon neutral commitments are more than twice as likely to have a science-based target than those without one. Organizations tend to use science-based targets to reduce emissions across their operations and value chains while carbon neutrality and net zero goals can reach beyond their value chains.
The report finds most of the Fortune Global 500 studied are based in North America or Europe, despite only being home to a little more than half of the companies.
