But momentum is Growing
Accenture, a multinational professional services organization, has produced a new analysis indicating that fewer than one in ten companies worldwide is on track to fulfill their net-zero emissions goals.
Accenture reviewed the emissions reduction commitments and data of the world's 2,000 largest public and private enterprises (G2000) for the new research "Accelerating Global Companies Toward Net Zero by 2050."
Despite financial turmoil and energy price swings over the past year, the study found that the rate at which significant corporations are establishing net-zero emission targets remains robust. 7 percentage points more than at the end of 2021, 34% of G2000 enterprises have made net-zero pledges, a rise of 34% since the end of 2021. Over half (51%) of G2000 enterprises in Europe now have a net zero aim, up 14 percentage points from the previous year, compared to 28% in North America (up 5pp) and 28% elsewhere in the world (up 4 pp).
According to the research, only 7% of G2000 firms are on track to meet their own net-zero targets for scope 1 & 2 emissions, indicating a need for a significant increase in emission reductions to meet these goals. According to Accenture, the remaining 93% of countries will need to at least quadruple the rate of emissions reductions by 2030 in order to accomplish their targets, and then continue to reduce emissions significantly thereafter in order to reach net zero by 2050.
Jean-Marc Ollagnier, chief executive officer of Accenture for Europe, stated:
"In the midst of global economic, political, and environmental crisis, a record number of firms have publicly committed to substantially decarbonizing by 2050. This increased aim is positive, but it is also evident that a significant acceleration of emission reductions is necessary."
Despite the fact that the majority of companies are not currently on track to meet their climate goals, the report found that momentum towards achieving sustainability goals has increased over the past year, with companies increasing their investments and taking more comprehensive steps to reduce emissions. In the current year, 84% of corporations aim to boost investments in sustainability efforts, up from 80% in the previous year.
In 2022, a record number of business targets will be certified by the Science Based Targets project, demonstrating that target formulation has gotten more sophisticated (SBTi). 83% of companies with net-zero goals now provide intermediate goals, up from 66% one year earlier. Transparency is also improving, with 81% of corporations with net zero aims reporting according to the Taskforce on Climate-Related Financial Disclosures (TCFD) recommendations.
The analysis underlined the significance of these activities, indicating that businesses with net-zero emission reduction goals significantly outperform those with lower emission reduction goals. The proportional change in Scope 1 and 2 emissions for companies with full net zero aims was 18% between 2011 and 2020, compared to a 20% increase for organizations without such targets.
The study also examined the practices of companies that were on track to achieve their net zero targets and found that they were more likely to ensure that their targets are based on science, incorporate methods to reduce energy use and emissions, implement more complex mechanisms such as internal carbon pricing, and report against prominent ESG frameworks.
Peter Lacy, worldwide leader of Accenture's Sustainability Services and Chief Responsibility Officer, stated:
"Now is likely a more difficult moment to be a CEO than at any point in the recent past, especially in balancing sustainability commitments, inflationary and recessionary pressures, and the need to provide shareholder and stakeholder value. This paper demonstrates a clear path for enterprises to produce value and impact at a time when capital markets, governments, and other organizations will increase pressure to execute on targets established through openness, comparability, and consistency.