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Published April 1, 2021
One fifth of the world’s largest public companies now have net zero commitments according to a new report.
The report by the Energy and Climate Intelligence Unit (ECIU) and Oxford Net Zero shows that 21% of the 2,000 largest public companies – representing sales of nearly $14 trillion – have made a commitment to reach net zero carbon emissions either by 2030 or 2050.
A majority of the companies with a net zero commitment also have interim targets, a published plan, and a reporting mechanism, the report finds. Just over a quarter of them meet robustness criteria as set out by the UN.
The report argues that companies should put stringent governance and transparency mechanisms in place and reveal the extent to which their plans rely on carbon offsetting schemes.
The report is the first systematic analysis of net zero commitments across countries, sub-national governments, and major companies. It finds that 61% countries, 9% of states and regions in the largest emitting countries, and 13% of cities over 500k in population have now committed to net zero.
In total, 124 countries have net zero targets, representing 52% of the global population. But governments, like companies, must back up their pledges with reporting mechanisms, published plans and credible interim targets. Countries without targets such as Australia and Russia are in the minority and looking increasingly isolated.
“Net zero commitments of one form or another now appear to cover 68% of global GDP and 56% of global population,” said Jeremy Nicholson, corporate affairs officer at Alfa Energy Group. “But there are huge qualitative differences between countries’ and companies’ plans in terms of transparency and reliance on offsets.”
The report also shows that, so far, China’s short-term commitments and policies do not look commensurate with its 2060 net zero pledge. Its 14th Five-Year Plan offers no planned reduction in the deployment of coal, no clarification on when peak emissions may occur. “Much work is still to be done before COP26 and beyond, it seems,” says Nicholson.
In the lead-up to the COP26 climate summit in Glasgow, there will be increased focus on the number of entities making net zero pledges. Meanwhile, countries such as Japan and the US will need to back their net zero ambitions with nearer-term 2030 emissions targets. The report also identifies a lack of clarity around how countries and companies will use offsetting to meet targets.
“It’s particularly important that actors clarify their approach to offsetting,” said co-author Dr Thomas Hale from University of Oxford. “Although some offsetting may be needed for so-called residual emissions in certain sectors, the most important priority is immediate emissions reductions. If every company and country relies on offsets and not enough on actual emission cuts, we simply won’t be able to accommodate these globally.”
Taking Stock: A global assessment of net zero targets
Tags Energy and Climate Intelligence Unit net zero commitment Oxford Net Zero