Carbon Competitiveness India Net Zero Trade Nexus 24 Jul 2025

India’s increasing solar potential, young workforce and cost competitive industries could help it become a leader of the clean economy. But its coal dependence is leaving the world’s fastest growing major economy increasingly exposed as trade partners — including the EU and UK — extend carbon pricing to cover high emission imports, and multinational companies shift to low-carbon supply chains.
Our report, Carbon Competitiveness: India at the Net Zero–Trade Nexus, finds that unless it accelerates decarbonisation, India’s exports will be increasingly exposed to penalties on carbon-intensive goods — putting billions in trade revenue and millions of jobs at risk as climate policies expand in breadth and depth.
Key findings:
<ul><li dir="ltr">India’s export engine runs on net zero markets: 68% of India’s $446bn in exports — supporting 32 million jobs — go to net zero-committed countries. Over half (55%) are to countries with net zero targets enshrined in law or official policy documents.</li><li dir="ltr">Carbon inefficiency is a competitive risk: India’s $150 billion Professional Services sector (including high value sectors such as IT outsourcing and call centres) ranks among the most carbon-intensive globally per million dollars of output. Competitor countries can serve the same markets up to 20 times more carbon efficiently.</li><li dir="ltr">Export-related jobs will become increasingly exposed: 7.5 million Indian jobs depend on exports to markets with active Carbon Border Adjustment Mechanisms (CBAMs), such as the EU. Another 4.7 million jobs are linked to countries planning or considering similar measures.</li><li dir="ltr">Global firms are decarbonising supply chains: 231 major multinational companies in India’s 10 top export markets — with combined annual revenues of $8.1 trillion — have Scope 3 (full value chain) coverage, meaning many are actively shifting toward lower-carbon suppliers. Another 45 companies, with $1.2 trillion in combined revenues, have Scope 3 emission reduction targets.</li></ul>

India export partners

A growing share of India’s trade is vulnerable to emissions-based measures — from Carbon Border Adjustment Mechanisms (CBAMs) to rising buyer scrutiny and value chain decarbonisation. With 68% of exports going to countries with net zero targets — supporting an estimated 32 million domestic jobs — India’s trade success is increasingly tied to its ability to cut emissions.
Implications of the EU CBAM
The EU accounts for more than 17% of India’s total trade value, supporting nearly 7.5 million Indian jobs. Yet India’s $5.7 billion of exports to the EU now face rising costs under the CBAM (equating to 8% of India’s total exports to the EU, which directly support 143,000 jobs). The carbon measure will be fully implemented in 2026 across iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity — and will expand in scope over time. India’s industries face a choice: accelerate clean growth to secure exports and investment — or risk losing market share and jobs to lower carbon competitors.
India’s export profile is diversified but exposed:
<ul>
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Professional and IT services, India’s two largest export sectors, accounted for $150 billion in 2023. But high carbon intensity threatens future market share as emissions become a procurement priority.
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Agriculture, while just 2% of export value, supports over a third of export-linked jobs — highlighting the economic and social cost of inaction.
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Manufacturing and textiles, both employment-rich and emissions-intensive, face growing pressure in key net-zero markets, especially in the EU.</li></ul>

CBAM numbers

The United States, India’s top export destination, took in one-fifth of total exports last year — with services, jewellery, and textiles dominating. However, its relatively low job return (17%) reveals how carbon-intensive, capital-heavy exports are failing to deliver broad-based benefits.
India’s trade with the European Union, worth $114 billion and supporting 7.5 million jobs, is particularly exposed to CBAM expansion. While current rules apply to basic metals, India’s EU-bound exports in chemicals, textiles and petroleum are much larger — and next in line for scrutiny as the CBAM scope widens.
India’s position in future supply chains is also at stake. In electronics, for example, India’s CO₂ intensity is five times higher than Vietnam’s, a significant disadvantage as firms look to diversify amid US-China tensions.

Cost competitiveness index India

As countries intensify climate action and carbon becomes a metric of competitiveness, India’s export economy stands at a crossroads. But in the absence of deeper decarbonisation and stable policy signals, rising electricity demand and continued coal reliance will prolong high embodied emissions in both goods and services. This risks undermining export competitiveness across the economy — including India’s booming professional services sector, which emits more CO₂ per unit of output than nearly every other major exporting country.
Yet this moment also presents opportunities. India has begun to decouple fossil fuel use from demand growth, added record-breaking clean energy capacity, and launched initiatives to mobilise clean industrial capital. Combined with its vast youth workforce, dynamic service economy and renewable potential, India is well placed to lead on lower-carbon industrial innovation — if it accelerates the right reforms. 
To seize the opportunity, India should act decisively. That means:
<ul>
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Accelerating grid decarbonisation to cut emissions across all sectors.
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Sending clear policy signals to build investor confidence — especially on clean tech manufacturing and coal transition.
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Using the new Climate Finance Taxonomy to unlock capital for low-carbon growth.
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Updating its Nationally Determined Contribution (NDC) in 2025 to reflect real economy transformation and signal export competitiveness.
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</ul>
This isn’t just about emissions — it’s about jobs, economic self-interest and India’s long-term stake in global trade.
Crucially, despite the US’s immovability on climate diplomacy and multilateral trade, other international partners should step up. For carbon-related trade measures like the EU and UK CBAMs to be seen as fair, they should be paired with financial, technical, and capacity-building support for lower-income countries — including the delivery of long-standing commitments under the Paris Agreement.
India’s economy is at an inflection point. The choices made now — at home and abroad — will determine whether it can keep pace with China in the economic race to a low-carbon future, or fall behind as climate policy and trade become increasingly intertwined.

How emissions and climate policies are reshaping global trade — and what India should do to stay competitive.

Carbon Competitiveness: India at the Net Zero–Trade Nexus

Carbon Competitiveness SA at the Net Zero Trade Nexus 9 Jun 2025

As countries ratchet up decarbonisation to meet their Paris Agreement commitments, the clean energy transition is redrawing the global trade map. 
South Africa’s carbon-intensive export model faces mounting pressure in a global economy increasingly shaped by climate policy, clean energy industrial strategies, and cross-border carbon pricing. While the country has a formal net zero target for 2050, this sits uneasily alongside short-term energy choices that favour fossil fuel expansion and delay coal phase-out — undermining confidence in the country’s decarbonisation trajectory and exposing its carbon-intensive exports to growing international risk.
<ul><li dir="ltr">Overall, 78% of South Africa’s exports — worth $135 billion — are sold to countries with net zero targets, supporting 1.2 million domestic jobs (or 7.5% of national employment in 2023).</li><li dir="ltr">For exporters from countries without credible carbon pricing like South Africa, <a href="https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en" target="_blank" rel="noreferrer noopener">Carbon Border Adjustment Mechanisms (CBAMs)</a> pose an expanding risk of reduced competitiveness, shrinking market access and potential job losses:<ul><li dir="ltr">422,000 South African jobs currently depend on exports to jurisdictions with active or incoming CBAMs, such as the EU's (fully active from 2026) and UK's (fully active from 2027).</li><li dir="ltr">89,000 jobs are linked to other economies considering similar measures.</li></ul></li><li dir="ltr">China, South Africa’s largest trading partner, imported $31.1 billion in goods and services in 2023 — over 98% from sectors where the emissions intensity of South Africa’s production exceeds that of China. As China moves to price domestic carbon more systematically, these sectors are likely to face growing carbon scrutiny.</li></ul>

Top 10 exporters

As climate policies like CBAMs gain traction, there’s a growing risk that Global South countries like South Africa are unfairly penalised — despite their low historical and per capita emissions. The BASIC group — Brazil, South Africa, India, and China — has criticised CBAMs as an ‘unfair shifting of responsibilities from developed to developing countries’, warning they could ‘aggravate the trust deficit amongst Parties.’ For developed countries, closing this trust gap and aligning trade with international equity requires honouring the Paris Agreement and ensuring unilateral measures like CBAMs are paired with financial, technical, and capacity support for rapidly developing economies like South Africa.

CBAM jobs

Meanwhile, multinational companies are accelerating supply chain decarbonisation — raising the economic stakes for countries that lag in cleaning up their grids and produce goods with high embodied emissions.
<ul><li dir="ltr">In South Africa’s 10 largest export markets, 323 major companies — representing $11 trillion in annual revenues — have full value chain (Scope 3) net zero commitments, meaning South African firms in their supply chains will have to measure and reduce emissions or risk losing business.</li><li dir="ltr">An additional 45 companies in those markets have full Scope 3 reduction targets, accounting for a further $1 trillion in annual revenues.</li><li dir="ltr">As emissions become a metric of competitiveness, carbon intensity is fast emerging as a trade barrier, particularly for high-emission sectors.</li></ul>
South Africa’s key export industries face especially acute exposure:
<ul><li dir="ltr">Mining and Basic Metals made up over 50% of South Africa’s export value in 2023, supporting 404,000 jobs.</li><li dir="ltr">Its Basic Metals sector has nearly twice the embodied CO₂ emissions of its next most carbon-intensive peer country, accounting for 32% of exports and 14% of GDP. More than 80% of Basic Metals exports go to markets with net zero targets, and 30% — worth $16.7 billion and supporting 23,000 jobs — go to countries with active or incoming CBAMs.</li><li dir="ltr">The automotive sector, South Africa’s third-largest exporter, is also at risk: 65% of its export value is exposed to CBAMs either active, incoming, or under discussion. South Africa’s embodied CO₂ emissions from auto manufacturing are the second highest in the world, and while existing CBAM schemes are currently focussed on raw materials their scope is expected to expand. South Africa should proactively mitigate this medium-term risk.</li><li dir="ltr">In agriculture, South Africa faces growing competitive pressure from lower-emissions suppliers: Across all top agricultural export categories and destination markets, alternative producers exist with at least three times lower embodied emissions — and are poised to scale into those markets.</li></ul>

NZ Trade SA Em Int

For South Africa, this is both a warning and an opportunity. With the second-highest carbon intensity of electricity generation among major economies (behind India) and high embodied emissions in goods, its exports will become more vulnerable. This has implications for jobs, inequality and tackling poverty in one of the world’s most unequal societies.
Yet South Africa also holds key advantages: world-class renewable energy resources, critical minerals essential to the global transition, and access to major trade and diplomatic frameworks, including the G20 and BRICS.
The country is a leading producer of platinum group metals, manganese, vanadium, and chromium — minerals critical to clean energy technologies, such as batteries, wind turbines and hydrogen fuel cells. The International Energy Agency (IEA) projects that the country will surpass its target of nearly 30 GW of total renewable capacity by 2030, as outlined in its Integrated Resource Plan (IRP). South Africa's Climate Change Act 2024 and Just Transition Framework provide a foundation for long-term, low-carbon, inclusive transformation. At the same time, the Electricity Regulation Amendment Act and revised Integrated Resource Plan mark a long-overdue positive shift in energy policy.
As the current US administration undermines the multilateral rules based system and the global trade landscape shifts beneath its feet, South Africa’s path forward is clear: pivot both geographically and strategically — from climate laggard to leader in net zero-aligned, trade-competitive growth.
But this path hinges on developed countries, especially those backing South Africa’s Just Energy Transition Partnership (JETP) — the UK, EU, Denmark, France, Germany, and the Netherlands — delivering on their $8+ billion commitment to support and accelerate the country’s clean energy transition.
To protect and grow its exports in key net-zero-aligned markets, South Africa should — with additional international support — accelerate grid decarbonisation, fast-track coal phase-out, and position itself as a strategic supplier in low-emission value chains. These steps could be formalised in its updated emissions-cutting Nationally Determined Contribution (NDC), due to the UN in September 2025.

South Africa’s export-oriented economy and labour market face growing risks as countries penalise carbon-intensive imports and companies decarbonise their supply chains.

Carbon Competitiveness: South Africa at the Net Zero–Trade Nexus

Equity and Just Transition Commitments in South Africa FINAL 15 01 25

Led by <a href="https://southsouthnorth.org/" target="_blank" rel="noreferrer noopener">SouthSouthNorth</a> in collaboration with the Net Zero Tracker, this report examines 50 of the largest public and private sector entities in South Africa, including national and regional governments, large cities, and major domestic-based and multinational companies. It analyses how these entities plan to integrate equity and just transition principles into climate mitigation strategies, including net zero targets.
SSN conducted this analysis to gauge progress on just transition efforts in South Africa while simultaneously enhancing the Net Zero Tracker's ability to assess governments and companies on:
<ol><li>‘Fair share’ responsibility for reducing greenhouse gas emissions, based on current and historical emissions.</li><li>Intentions of implementing a just and equitable transition that supports communities, workers or vulnerable groups under their jurisdictions.</li></ol>
The South African Context South Africa stands at a crossroads in its climate journey. With a coal-dependent energy sector underpinning its economy, the nation faces a delicate balancing act between achieving economic stability and meeting its decarbonisation goals. Robust tracking and enhanced transparency of net zero commitments at national and subnational levels are essential to raise ambition and attract investment for a sustainable transition. Equity lies at the heart of credible climate strategies, both in South Africa and globally. A Just Transition ensures that the move to a low-carbon economy is inclusive and fair, addressing the needs of the most vulnerable communities affected by socio-economic shifts. Why This Matters South Africa’s transition to a low-carbon economy is not only a local imperative but a global benchmark for addressing the complex interplay of climate action, socio-economic stability, and equity. This paper offers a roadmap for stakeholders to align climate strategies with the principles of a Just Transition, ensuring that no one is left behind in the race to net zero.

Public sector entities assessed

SSN Public sector

Private sector entities assessed

SSN Private sector

Report findings 
<ul><li>Disparities in climate progress are evident, as climate targets vary across South African provinces, cities, and at the national level, with significant progress in some areas and slower adoption in others.</li></ul>
<ul><li>City leadership is a key driver, with urban centres like Cape Town, Durban, Johannesburg, and Pretoria are leading climate action through ambitious net zero targets and comprehensive just transition measures, often surpassing provincial frameworks. </li></ul>
<ul><li>One-directional influence of provincial strategies is observed, as provincial climate strategies exert a positive influence on city-level policies, limiting the potential for integrated action. The Western Cape serves as a notable example, where the province’s comprehensive net zero strategy has significantly shaped Cape Town’s ambitious climate policies, enabling alignment with key decarbonisation milestones for 2030, 2040, and 2050. However, this influence appears constrained to more affluent regions.</li></ul>
<ul><li>Wealth as a driver of climate ambition is evident, with more affluent provinces and cities formulating more ambitious climate strategies and just transition measures, while less affluent regions lag behind.</li></ul>
<ul><li>Private sector commitments to a just transition are inconsistent across sectors, with some sectors exhibiting strong engagement while others lag.</li></ul>

References To Equity

Report recommendations
<ol><li>Enhance government coordination between city, provincial, and national climate strategies through formal intergovernmental committees, leveraging the Climate Change Act (2024) for national oversight and alignment.</li><li>Support less affluent regions by providing targeted financial and technical assistance, including capacity-building and resource mobilisation, as outlined in the Climate Change Act (2024).</li><li>Develop sector-specific strategies to encourage sectors with low engagement in just transition principles to create detailed climate action plans, guided by sector-specific guidelines and reporting mechanisms under the Climate Change Act (2024).</li><li>Improve private sector accountability by incentivising multinational companies to adopt detailed just transition commitments with enhanced corporate reporting and transparency in line with the Climate Change Act (2024).</li><li>Ensure transparent and robust targets by establishing clear climate targets, including separate emissions reduction and removal targets, and integrating scope 3 emissions into overall strategies to enhance accountability.</li></ol>

Assessing approaches to implementing equity and just transition principles in climate mitigation strategies across South Africa's public and private sectors.

Equity and Just Transition Commitments in South Africa

Net Zero Stocktake 2024

To have a realistic chance of limiting global average temperature increase to 1.5°C with no or limited overshoot, the world must reach net zero carbon dioxide emissions in the early 2050s, alongside rapid, deep, and sustained reductions in other greenhouse gas emissions. All emissions should reach net zero approximately two decades later. 
Net Zero Stocktake 2024 offers critical insights into the progress of whole-economy net zero target-setting and the overall performance of more than 4,000 entities on key procedural and substantive elements of net zero integrity — essentially, whether mitigation targets and their associated strategies contain the core components necessary to drive deep decarbonisation over the next 30 years. This is our fourth comprehensive annual report of net zero target intent and integrity across all countries, states &amp; regions in the largest 25-emitting countries in the world, all cities with more than 500,000 inhabitants, and the largest 2,000 publicly listed companies in the world.

Key findings this year:
<ul><li>Net zero target-setting has consolidated across states and regions, cities, and companies, with increases of 28%, 8%, and 23%, respectively, since the Net Zero Stocktake 2023.</li><li>More than 40% of non-state entities still lack emission reduction or net zero equivalent targets.</li><li>Although the number of credible net zero targets is growing, 5% or less of entities across states and regions, cities, and companies meet all our minimum procedural and substantive integrity criteria.</li><li>The 655 Race to Zero members in the Net Zero Tracker database perform significantly better on minimum integrity criteria compared with non-members. But both groups need to improve.</li><li>National-level net zero (or other mitigation) targets serve as a ‘ceiling’ of ambition for subnational governments, but some subnational regions go above and beyond.</li><li>Improving vertical alignment between national and subnational governments is critical, especially in areas such as target-setting, coordination, and policy implementation.</li></ul>

Figure 1 Time

Of the over 4,000 entities we currently track, at least 1,750 now have net zero targets, up from 769 in December 2020.
Over the past 18 months, net zero target-setting has increased among states and regions, cities, and companies, growing by 28%, 8%, and 23%, respectively. However, more than 40% of non-state entities still lack any form of mitigation target, including major companies such as Tesla, Nintendo, and Berkshire Hathaway. 
Since our last <a href="$PRIMARY_SITE_URL/analysis/net-zero-stocktake-2023" target="_blank" rel="noreferrer noopener">Stocktake report</a> 18 months ago, we have observed a significant rise in net zero target-setting among companies based in Asia. The number of companies with net zero targets has grown in China from 27 to 48, in India from 20 to 29, in Japan from 118 to 184, and in South Korea from 22 to 41.

Figure 2 Coverage

The world requires more short- and long-term targets to be set, but it is equally important that existing targets are strengthened. Nearly two years after the UN Secretary General’s Integrity Matters report <a href="$PRIMARY_SITE_URL/insights/un-hleg-net-zero-recommendations" target="_blank" rel="noreferrer noopener">clarified what ‘good net zero’ looks like</a>, non-state entities have made very limited progress in enhancing the credibility of their targets.
Although the number of credible net zero pledges has grown, only 5% or fewer of non-state entities meet all the basic procedural and substantive integrity criteria we evaluate.

Fig 4a States

Fig 4c Companies

This year, we examine how members of the UN Climate Change High-Level Champions’ <a href="https://climatechampions.unfccc.int/system/race-to-zero/" target="_blank" rel="noreferrer noopener">Race to Zero campaign</a> compare with non-members on integrity criteria. The Race to Zero consists of 14,000+ members contributing to halving global emissions by 2030 and net zero by 2050 at the latest.
Overall, we find that the hundreds of Race to Zero members in the Net Zero Tracker database outperform non-members on both procedural and substantive measures, though both groups still have significant room for improvement.

Figure 5 Rt Z

Net zero target setting by subnational governments in 14 major emitting nations
Alongside our usual overview of annual net zero progress, we investigate how state and regional entities in 14 major-emitting countries — Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, South Africa, the UK, and the US — are progressing on net zero.

Regions Net Zero Tracker

Subnational governments in these countries play a critical role in mitigation efforts, though they vary significantly in the powers they possess and the level of climate ambition they set. We find, among other things, that:
<ul><li>In general, national-level net zero (or other mitigation) targets serve as a ‘ceiling’ of ambition, but some subnational governments go above and beyond. For example, three of Australia’s eight self-governing states, seven of Germany’s 16 states, and 14 of India’s 46 states have set earlier net zero targets than their national governments.</li><li>Many subnational regions align directly with the level of national climate ambition. This is important for both implementation and credibility: multilateral and national ambitions tend to percolate down to lower levels of government, which are closer to the practical implementation of policies.</li><li>There are instances where subnational regions may have influenced national net zero target-setting. For example, in Australia and Japan several subnational governments published net zero targets before their national governments. </li><li>Subnational governments that can have some degree of autonomy in climate policy have demonstrated encouraging progress, especially in sectors like transport and buildings.</li></ul>
National governments could unlock more subnational progress by, for example, supporting regions through policy guidance on implementation and enhanced coordination. Further support would not only help achieve current targets but also foster the conditions and consensus needed for goals and policies that align with national objectives.

Short history

Overall, this report presents a world on the path to net zero but in dire need of swift, sustained action to turn targets into concrete, credible implementation plans. The third ratchet of the Paris Agreement — the submission of new emissions-cutting NDCs — culminating at COP30 in Brazil in 2025, offers a crucial opportunity to achieve this necessary shift.
With the wave of 2024 elections passing into the rear-view mirror, it is time for governments and companies to deliver. Those that have targets must bring them up to the minimum standard of credibility; those without targets risk being left behind in a transition that is speeding up. As breakthrough trends in clean energy and transportation reach scale, and as net zero regulations and litigation increasingly bite, hedging becomes a less attractive strategy. 
Companies and governments that ratchet up their credibility will reap the financial, reputational and political benefits of ‘walking the talk’, while those that remain on the fence will look increasingly out of step. The time to ratchet credibility is now.

Assessing the status and trends of net zero target setting across countries, subnational governments and companies.

NZT A Distinctly Private Pursuit Net Zero 22 April 2024

A Distinctly Private Pursuit: Not going net zero

Weighted by annual revenue, net zero targets now cover nearly 80% of the world’s largest 2,000 publicly listed companies, up from less than 20% in 2020. The integrity and clarity of these targets are weak, but voluntary target-setting at the publicly listed level continues to reach new heights.
The picture at the private company level is starkly different. As the net zero world for corporates increasingly moves from being defined by voluntary efforts to mandatory rules, privately companies continue to trail behind their publicly listed peers by around half on net zero target-setting. They also trail behind on the integrity of their strategies to achieve these targets.
In this analysis, we compare the net zero targets and other mitigation efforts of the world’s largest 100 private companies with the world’s largest 100 public companies. 
In terms of net zero target-setting, we found that: 
<ul><li>Two-fifths (40) of the largest private companies have set net zero targets, compared with seven-tenths (70) of the world’s largest public companies.</li><li>More than half (52) of the world’s largest private companies have set net zero or emission reduction targets. This compares with 82 of the world’s largest public companies.</li><li>The combined annual revenue of private companies with net zero targets is $2.2 trillion. The combined revenue of private companies without any mitigation measures is $1.7 trillion. For those without net zero targets, it is $2.8 trillion.</li><li>Only four of the world's largest 10 private companies have set net zero targets, compared with nine of the world's 10 largest public companies.</li></ul>

Quantity Private Pursuit

In terms of the quality of the 40 net zero targets, we found:
<ul><li>Only eight (20%) private companies have published plans to deliver on their pledges, compared with 56 (80%) of the 70 public companies with net zero targets.</li><li>Only two (5%) — IKEA (Netherlands) and Bechtel (US) — rule out the use of carbon credits to achieve their net zero goals.</li></ul>
From a geographic perspective across all 100 private companies:
<ul><li>Of the 28 headquartered in the EU and the UK, 21 (75%) have net zero targets. But only a small minority have published plans to achieve these targets.</li><li>Of the 50 headquartered in the US, only 11 (22%) have net zero targets, substantially less (in absolute and relative terms) than US-based public companies, where 28 of 43 (65%) have net zero targets.</li><li>Of the 16 headquartered in China, four have net zero targets, up from just one in 2022.</li></ul>

Quality Private Pursuit

In the eighteen months since we last looked into private companies' net zero and emission reduction efforts, the quantity and quality of targets have barely budged.
Risky business
This report shows that dozens of private companies in the largest markets in the world — the EU, the US and China — still do not have net zero or emission reduction targets. As the regulatory landscape develops around them, staying silent on net zero increases transition risks for themselves, and undermines collective emission-cutting efforts by governments and other non-state entities.
In the EU, for example, two of the 23 assessed EU-based private companies have no emission reduction targets whatsoever, raising questions about whether they are ready for the effects of the mandatory Corporate Sustainability Reporting Directive (CSRD) — which creates a ‘duty to disclose’ — and the mandatory Corporate Sustainability Due Diligence Directive (CSDDD) — which will, once effective, create a ‘duty to act.' They are: 
<ul><li dir="ltr">E.Leclerc (FRA)</li><li dir="ltr">Mercadona (ESP)</li></ul>
<div>For private companies, the findings of this report underscore the mounting transition risks faced by those neglecting to address their emissions and/or ignoring the regulatory landscape that is increasingly seeking to mandate climate action. 
For policymakers, this report's findings reinforce that bringing private companies into the shared sunlight with their public counterparts and creating a ‘level playing field’ on regulations are prerequisites for bolder corporate action on climate change.</div>

The data set for the 100 private companies can be downloaded using the 'DOWNLOAD DATA' button in the header. Filter on 'private_company'.

Climate regulations are increasingly capturing private firms in their remits, raising risks for those determined to keep their heads in the sand and out of the sunlight.

Despite rapid and wide uptake of net zero targets, the majority of countries, states and regions, cities and companies have not yet committed to end fossil fuel exploration, production, and use on a timescale consistent with the Paris Agreement’s temperature goals. 
Watch a replay of the Net Zero Tracker press conference launching the report at the COP28 UN climate summit <a href="https://unfccc.int/event/energy-and-climate-intelligence-unit" target="_blank" rel="noreferrer noopener">here</a>.

NTZ In the Pipeline Status Fossil Fuel Phase Outs 2023

In the pipeline FI

The main driver of climate change is emissions of carbon dioxide (CO₂), and the main source of CO₂ emissions is the use of fossil fuels. Fifteen nations including Ethiopia, France and Spain recently recognised this fact, calling for a global agreement to phase out fossil-fuel production because ‘fossil fuels are at the root of this [climate] crisis’ (High Ambition Coalition, 2023). 
Calls for removing fossil fuels from the world’s energy system are growing louder because now there are viable alternatives: 
<ul><li>At COP28, nations, including China and the US, are preparing to agree to a new global plan to triple renewable energy capacity by 2030 (COP28 Presidency, 2023).</li><li>A new record of adding more than 500 gigawatts (GW) of renewable generation capacity is likely to be set this year (International Energy Agency, 2023).</li><li>Solar PV and onshore wind are now more competitive than fossil fuels — and in China alone, projected additions of solar PV and offshore wind by 2030 are now three times higher than in 2021 (International Energy Agency, 2023; IRENA, 2023).</li><li>Sales of electric vehicles could surpass those of fossil fuel-burning cars within the next six years. In 2020, one in 25 cars sold was electric; just three years later, it is one in five (Boehm et al., 2023).</li></ul>
Unlike with the wider uptake and investment in clean energy, there is scant data on national, subnational and private sector entities’ ambition and timeframes for phasing out fossil fuels. This analysis is our contribution to closing the data gap on the most important part of the climate problem.

Despite rapid and wide uptake of net zero targets, the majority of countries, states and regions, cities and companies have not yet committed to end fossil fuel exploration, production, and use on a timescale consistent with the Paris Agreement’s temperature goals.

On coal, 3% of coal-producing countries with net zero targets (2/63) have committed to fully phase out exploration. More have committed to phase out production: 13% (6/45) of coal-producing nations have committed to full coal production phase outs, which represents 5% of global coal production (of countries with a net zero target).
3% of oil-producing countries with net zero targets (3/91) have committed to fully phase-out oil exploration, with a similar number (3%) of gas-producing countries with net zero targets committing to fully phase out gas exploration. 3% (5) of oil-producing countries with net zero targets have committed to fully phase-out oil production, which represents 0.8% of global oil production (of countries with a net zero target). 3% (2) of gas-producing countries with net zero targets have committed to fully phase-out gas production, which represents 0.8% of global gas production (of countries with a net zero target).
National net zero targets cover 88% of global GHG emissions, but only 7% of those emissions are covered by at least one full or partial phase-out commitment relating to exploration, production or use (fossil fuel activities) of coal, oil or gas (fossil fuel types), while just 18% of the combined revenue of our sample of publicly-listed companies is covered by at least one phase-out commitment across all fossil fuel activities and types.
Corporate coal phase-outs show signs of progress: 56% (145 of 259) of publicly-listed companies that engage in (or facilitate) coal production have made a full or partial phase-out pledge for coal. Much less advanced are phase-outs of either oil or gas. Only 3% of companies actively involved in oil or gas production have a full oil production phase-out pledge, with the same percentage pledging to phase-out gas production.
Regionally, Africa has the highest percentage of company fossil fuel phase-out targets (50%, or 5 of 10 companies), with a strong showing from Europe (27%, or 88 of 328). North America lags significantly behind with only 9% (31 of 327) of companies in the sample having any kind of phase-out commitment.
To move forward, countries, states and regions, cities and companies can look to examples of good practice. For example:
<ul><li dir="ltr">Spain has embedded national phase-out targets into legislation.</li><li dir="ltr">Stockholm has extended the remit of its phase-out to industry-related fossil fuel use.</li><li dir="ltr">Ørsted has successfully diversified its business model away from fossil fuel dependence.</li></ul>
An urgent short-term priority for all entities, particularly countries and their governments, should be committing to urgently phase out exploration for any new reservoirs or deposits of all fossil fuel types.

National Coal Use Phase Outs

The status of fossil fuel phase-out commitments across nations, regions, cities, and companies with net zero targets.

In the pipeline: The status of fossil fuel phase-out commitments

<ul><li dir="ltr">Net Zero Tracker assesses the 1,000th company with a net zero target from the world’s largest 2,000 publicly-listed companies.</li><li dir="ltr">66% of the annual revenue of the world’s largest 2000 companies is now covered by a net zero target.</li><li dir="ltr">UK backslide on net zero implementation is misaligned with goals of the bulk of the largest UK businesses.</li><li dir="ltr">One-third of the world’s largest publicly-listed companies have still not set any form of emissions reduction target.</li></ul>
<div>London, 6th November 2023: The<a href="http://www.zerotracker.net"> Net Zero Tracker</a> has assessed the 1,000th company net zero target from within the Forbes Global 2000 list of the world's largest companies - marking a significant milestone in the global goal to drive greenhouse gas emissions to net zero by the middle of this century.
The milestone reinforces that national climate commitments (which cover 88% of global GHG emissions and 92% of the global economy) have continued to cascade across the corporate sector.<ul><li dir="ltr">The number of company net zero targets has risen by more than 40% in 16 months — from 702 in June 2022 to 1,003 in October 2023.</li><li dir="ltr">The aggregate annual revenue covered by net zero targets is $27 trillion.</li></ul>
John Lang, Project Lead, the Net Zero Tracker (ECIU), said:
“A clear line in the sand on net zero has surfaced. Countless net zero targets are credibility light, but now we can say for certain that most of the world’s largest companies have shifted to the right side of the line on net zero intent.
“With credible net zero target-setting a proxy for forward-thinking, future-proofing companies, it begs a simple question: are the firms we’re investing in, working for and buying from on the right or wrong side of the line?”
Bulk of UK business preparing for net zero, despite government backsliding:
Importantly, the analysis assessed the quantity of net zero targets set by companies based within the United Kingdom (UK), where a recent policy review delayed the implementation of the country’s net zero plans. Despite the government backtracking, the NZT found that the majority of UK-based companies within the Forbes2000 have committed to the net zero transition:<ul><li dir="ltr">94% (72/77) of UK-based companies within the Forbes2000 have set net zero targets.</li></ul><ul><li dir="ltr">Only one UK-based company within the Forbes2000 has not set any mitigation target - private equity firm, 3i.</li></ul>
The Rt Hon Chris Skidmore MP, chairman of the UK Net Zero Review, said:
“The bulk of the UK’s largest businesses are committed to net zero - and are planning and investing to capture the opportunities of the transition. Having signed net zero into law four years ago, it's remarkable that such progress has been made.
“However, the recent stop-start approach to policy is putting business investment at risk and undermining investor confidence. Now is the time for the UK to press this advantage by accelerating policies to support the engines of our economy to deliver on net zero.”
The Net Zero Tracker’s methodology for assessing climate commitments supports the UN Secretary-General’s <a href="https://zerotracker.net/insights/un-hleg-net-zero-recommendations">High Level Expert Group (HLEG)’s guidance on ensuring the credibility and accountability of net zero pledges by non-state entities.</a> The NZT also ‘signposts’ to other accountability-geared organisations such as <a href="https://unfccc.int/climate-action/race-to-zero-campaign">Race to Zero</a>.
Despite continued progress on the quantity of corporate target-setting, the NZT warns that the integrity of company mitigation targets should urgently improve if they are to be achieved in line with the Paris Agreement’s temperature targets. The last Net Zero Stocktake, published in June 2023 showed that: <ul><li dir="ltr">Only 37% of corporate net zero targets fully cover Scope 3 emissions (on a self-reporting basis).</li><li dir="ltr">Only 13% of corporate net zero targets specify quality conditions under which any offsets would be used, signalling an overreliance on low quality offset credits, rather than emissions reductions.</li><li dir="ltr">Only 4% of company net zero commitments meet the revised ‘Starting Line criteria’, set out in June 2022 by the UN Race to Zero campaign (i.e. setting a specific net zero target, coverage of all greenhouse gases (all emission scopes for companies), clear conditions set for the use of offsets, published a plan, implement immediate emission-cutting measures, annual progress reporting on both interim and longer term targets). </li></ul>
Camilla Hyslop, Co-Data Lead, Net Zero Tracker (University of Oxford): said:
“On the final approach to the vital COP28 climate summit, companies should be in no doubt as to what ‘good net zero’ looks like. The UN Expert Group’s guidelines have become the yardstick against which pledges are measured. For regulators and journalists alike it’s now clearer than ever which companies are attempting to garner credit with weak pledges. 
Natasha Lutz, Co-Data Lead, Net Zero Tracker (University of Oxford): said:
“Net zero commitments can provide a useful framework to guide companies, including their value chains and investors, through an orderly, efficient transition - but only if commitments are set with robustness and transparency. Weaker targets hinder companies’ ability to implement effective emissions reductions, and cause greater exposure to climate and reputational risk, and stakeholder mistrust.” 
Dr. Takeshi Kuramochi, Senior Climate Policy Researcher at NewClimate Institute, said:
“With half of the world’s largest companies now covered by commitments, it’s clear that net zero is now a corporate norm.
“While most companies set net zero pledges with good intentions, many of the pledges are still based on self-defined emission boundaries and scope and thus not aligned with the global net zero emission goal of the Paris Agreement. 
“Many companies need to urgently refine their pledges and implementation strategies in line with the UN Expert Group’s recent markers of credibility and other Paris-aligned standards.”
Peter Chalkley, Director, the Energy and Climate Intelligence Unit (ECIU), said:
“The world’s largest companies are setting their sights on net zero in no small part because of the global momentum behind clean industries. 
“We know that mixed signals from the UK Government over net zero have spooked investors and businesses who are looking at where to make their investments. 
“With the US powering ahead with the Inflation Reduction Act driving the construction of new EV plants and battery factories, the question for the UK Government is how will it respond? All eyes are on the autumn statement.”
The Net Zero Tracker will launch its 7th analysis of global net zero pledges at COP28, Dubai in just under a month. The analysis will show the level of alignment of the world’s largest 4,000 entities with the UN’s guidance that credible net zero commitments require specific targets for ending the use and / or support for fossil fuels, including whether they claim to align with the IPCC and IEA pathways. 
Notes to editors:
For further information, or to set-up a briefing, please contact:
Nick Hay, communications and stakeholder lead, the Net Zero Tracker
<a href="mailto:nick.hay@eciu.net">nick.hay@eciu.net</a> / +44 (0) 7378 250 288
About Net Zero Tracker (NZT):
 
<a href="http://www.zerotracker.net">Net Zero Tracker</a> is the most comprehensive and up-to-date database of net zero commitments made by nations, states &amp; regions, cities and major companies. It includes:
 <ul><li dir="ltr">all UNFCCC member states and a selected number of territories; </li><li dir="ltr">subnational states and regions in the 25 largest emitting countries;9 </li><li dir="ltr">all cities around the world with populations over 500,000; </li></ul><ul><li dir="ltr">Publicly-traded companies that were listed in the Forbes Global 2000 in 2020.10 </li></ul>
Using a combination of automated web data-scraping and manual searching by volunteer data analysts working in a range of languages, the Tracker gathers and collates data on the status of net zero targets and robustness parameters across these 4000+ entities. Parameters include the existence of interim targets, intentions regarding offsetting, the existence of a published plan, and what the target covers in terms of greenhouse gases and emission scopes. 
NZT is an independent research consortium, comprising <a href="https://eciu.net/">The Energy &amp; Climate Intelligence Unit (ECIU</a>);<a href="https://newclimate.org/"> </a><a href="https://datadrivenlab.org/">Data-Driven EnviroLab</a> (UNC); <a href="https://newclimate.org/">NewClimate Institute</a>; and<a href="https://netzeroclimate.org/"> Oxford Net Zero</a>. 
At the core of the NZT database is a cohort of student volunteers, primarily from the University of Oxford, who scrutinise the robustness of targets of all UNFCCC member countries, all cities with populations greater than 500,000, all regions in the top 25-emitting countries, and all of the 2,000 largest public companies. NZT applies advanced AI/ML approaches to automatically extract key data points on net zero targets to increase the efficiency and scalability of data collection.
ENDS </div>

Significant milestone reached in corporate net zero, but major credibility gap remains

New analysis: Half of world’s largest companies are committed to net zero

Net Zero Stocktake 2023

If Phase One of net zero was about accepting the scientific principle of net zero and Phase Two about pledges aiming to get there, the much more consequential Phase Three is about delivery. For the over 4,000 entities currently in the Net Zero Tracker database, the last year confirms there is nowhere to hide. 
In November 2022, the UN Secretary-General’s Expert Group set out what ‘good' net zero looks like; in June 2023, the UNFCCC established the Global Climate Action Recognition and Accountability Framework for non-state entities. Nations, regions and corporates that have set long-term targets, but are doing nothing concrete to meet them, are coming under more scrutiny than ever. 
Net Zero Stocktake 2023 is our third comprehensive annual report of net zero target intent and integrity across all nations, all states &amp; regions in the largest 25-emitting countries in the world, all cities with 500,000+ inhabitants, and the largest 2,000 publicly-listed companies in the world. We lift the hood on net zero trends globally, including assessing the number of major governments and companies that have pledged net zero, the number that have not, and, most importantly, those that have pledged but not yet delivered on important markers of credibility.

<ul><li>Growth in the number of national and subnational net zero targets has slowed, but company net zero target-setting momentum continues at speed.</li><li>The share of large publicly-listed companies with net zero targets has more than doubled in a little over two years, from 417 to 929.</li></ul>
<ul><li>National government net zero targets underpinned by legislation or policy documents increased substantially in the two-and-half years, from 7% to 75%.</li></ul>
<ul><li>A significant share of subnational and corporate entities still lack any emission reduction target whatsoever, at the global level and within the G7.</li></ul>
<ul><li>Collectively, there are very limited signs of improvement in the robustness of subnational and corporate net zero targets and strategies.</li></ul>
<ul><li>More entities are clarifying their intention to use carbon dioxide removals (CDR) in their value chain.</li></ul>
<ul><li>Despite having net zero pledges, no major producer countries or companies have committed to phasing out fossil fuels.</li><li>Emerging voluntary net zero standards have strongly converged on principles, but more specificity is required to give clarity to those wanting to set credible strategies.</li></ul>
Of the over 4,000 entities we currently track, at least 1,475 now have a net zero target, up from 769 in December 2020.

NZS target numbers

National government net zero targets underpinned by legislation or policy documents increased substantially in two-and-half years. Today, 72 countries have net zero targets either enshrined in legislation or outlined as a goal in policy documents.

NZS Countries

NZS coverage

A majority of non-state entities have yet to set a net zero target

Strikingly, a significant share of subnational governments and company entities still lack any emission reduction target whatsoever — at the global level and within the G7. At the corporate level, the EU is well ahead of the US on net zero target setting. 
In total, we could not identify any emission reduction target for four UNFCCC member states, 439 states &amp; regions in the top 25 emitting countries, 766 major cities, and 734 of the world's largest publicly listed companies.

NZS Regions

NZS Cities

NZS Companies

At the sectoral level, we found that the Biotech, Health Care &amp; Pharma (44%), Infrastructure (46%), and Retail (26%) sectors have particularly high percentages of companies without any emission reduction target at all. Unsurprisingly, the same three were among the worst performing sectors on net zero target-setting: less than 40% of companies in these sectors have net zero targets, compared with, for example, Power Generation (71%) and Fossil Fuels (67%).

NZS Sectors

Net zero integrity?

Collectively, there are very limited signs of improvement in subnational and corporate net zero integrity. We observed essentially no progress on the percentage of entities that meet all six Race to Zero criteria: (1) set a specific net zero pledge (by 2050 for entities within OECD countries); (2) include all GHGs (all emission scopes in case of companies); (3) clarify conditions on the use of offsetting; (4) publish a plan on how it intends to achieve its interim and long-term targets; (5) implement an immediate action to proceed on its commitments (6) publish annual progress reports on both their target achievements and measures undertaken annually.

Starting Line

For companies, several recent analyses highlight the lack of Scope 3 emissions coverage and the unregulated use of offsets as key concerns that undermine the integrity of corporate net zero targets, which is why they became part of the starting line criteria of the Race to Zero campaign from June 2022.

NZS Offsets

More entities are clarifying their intention to use carbon dioxide removals (CDR) within their value chain. At least 25% of companies plan to use CDR to achieve their targets. This number includes corporates that plan to procure carbon credits from CDR projects outside their value chain and companies that invest in CDR within it, also referred to as 'insetting.'

NZS CDR

Both the IPCC and IEA have shown that deep cuts in fossil fuel consumption and production are essential components in achieving net zero and delivering the Paris Agreement temperature targets.
Despite the bulk of the 114 Fossil Fuel companies in our database having net zero targets, we found that none of these companies plans to fully transition away from their fossil assets or associated businesses. These companies could reflect on the UN Expert Group’s fifth recommendation that a fossil-fuelled future is incompatible with what 195 nations agreed to when they signed the Paris Agreement.

Fossil Fuels

Net zero standards convergence

In the absence of universal and binding net zero-related policy and regulation, emerging voluntary standards and initiatives have provided guidance to company entities on how to pursue net zero with integrity. 
Section Four of our report provides an overview of key documents on company net zero targets released since COP26, including the UN Expert Group (HLEG), the ISO Net Zero Guidelines, the UN Race to Zero campaign's Starting Line and Leadership Practices 3.0 criteria, the Science Based Target initiative's Corporate Net Zero Standard, and the Corporate Climate Responsibility Monitor 2023 methodology.
Broadly, guidance converges at the high-level, but more specificity is required to make pathways clearer for all entities wishing to set credible and robust net zero targets.

NZS Convergence v2 Convergence

Net zero has had to grow up quickly, but is now firmly in an age of implementation. As the United Nations climate talks focus this year on taking stock of collective progress towards the Paris Agreement goals, we offer three conclusions from our analysis for reflection:
<ul><li>A majority of entities, eight years after the Paris Agreement was signed, have yet to set a target aligned to its goals</li><li>Those entities that have set a target now need to urgently make it a robust strategy, aligned to the requirements of science</li><li>The clear consensus that has emerged on what is required for robust net zero targets, serving as a guiding star for both commitments and implementation.</li></ul>
Above all, we need more entities to sign up to net zero, and need those that have pledged to step up.

Assessing the status and trends of net zero target setting across countries, sub-national governments and companies.

Last week saw the UN publish its high-level expert report on ensuring the credibility and accountability of net zero pledges by non-state entities. The Net Zero Tracker already collects data relevant to the majority of the report’s 10 recommendations. Here, we restate the recommendations and evaluate how regions, cities and large companies are tracking against them.

Net zero targets not only cover 90% of the global economy, they are everywhere: in governments’ economic development plans, corporate strategies, investors’ portfolio targets, public-sector roadmaps, and the manifestos of regional governments and city councils. 
COP27 — the ‘implementation COP’ — is shining a spotlight on how robust existing pledges are, and is also putting pressure on those cities, regions, and companies that have yet to align with net zero. While there has been a proliferation of standard-setting and accountability mechanisms, many entities have yet to align their net zero commitments to robust criteria. 
This problem was the rationale for the UN Secretary General António Guterres to establish a <a href="https://www.un.org/sg/en/content/sg/statement/2022-03-31/secretary-generals-remarks-the-launch-of-the-the-high-level-expert-group-net-zero-emissions-commitments-of-non-state-entities-delivered">High-Level Expert Group on Net-Zero Emissions Commitments of Non-State Entities (HLEG)</a>. National governments have the lion’s share of responsibility, he explained, but “we also urgently need every business, investor, city, state and region to walk the talk on their net-zero promises.”
 
The net zero pledges made by these ‘non-state entities’ suffer from an overall deficit of credibility. In our <a href="https://zerotracker.net/analysis/net-zero-stocktake-2022">Net Zero Stocktake 2022</a> analysis, we found that fewer than one-fifth of net zero targets set by national and subnational governments, and only one-third of the world’s largest publicly-listed companies with net zero targets, meet minimum standards of integrity. Not all net zero pledges have to be created equal, but most still lack the most basic of details necessary for delivery, including: 
<ol><li dir="ltr">How they are defined, for example what greenhouse gases or scope they cover</li><li dir="ltr">A detailed plan for achieving them</li><li dir="ltr">Reporting and reviewing progress</li><li dir="ltr">How they intend to use carbon credits (offsets).</li></ol>
The recent HLEG recommendations lay out explicitly the minimum criteria for net-zero targets that companies, cities and regions should meet. In this analysis we focus on individual HLEG recommendations, and provide a global snapshot from the Net Zero Tracker of the current state of play against six of them.

1. Announcing a net zero pledge

HLEG recommendation

A net-zero pledge should be made publicly by the leadership of the non-state actor and represent a fair share of the needed global climate mitigation effort. The pledge should contain interim targets (including targets for 2025, 2030 and 2035) and plans to reach net zero in line with IPCC or IEA net-zero greenhouse gas emissions modelled pathways that limit warming to 1.5°C with no or limited overshoot, and with global emissions declining by at least 50% by 2030, reaching net zero by 2050 or sooner. Net zero must be sustained thereafter.
Net Zero Tracker stats

HLEG replace 1 02

Net zero pledges have now been made by 116 of 713 assessed regions, 241 of 1,177 assessed cities, and 799 of 2,000 assessed publicly listed companies. These are up from 110, 180, and 617 respectively just 12 months ago. A substantial fraction of these remain as mere pledges or proposals, and have not yet been firmed up in published documents or laws. Net zero pledges alone are not a sign of climate leadership - they must be accompanied by a deep emission reductions commitment to be meaningful.

HLEG 1 1

Of those with non-state entities with net zero targets, the end target year breakdown. The vast majority of entities have net zero targets by 2050. A small, but worrying, proportion of companies do not specify when their net zero targets are to be achieved by.

2. Setting net zero targets

HLEG recommendation
Non-state actors must have short-, medium- and long-term absolute emissions reduction targets and, where appropriate, relative emissions reduction targets across their value chain that are at least consistent with the latest IPCC net-zero greenhouse gas emissions modelled pathways that limit warming to 1.5°C with no or limited overshoot, and where global emissions decline at least 50% below 2020 levels by 2030, reaching net zero by 2050 or sooner.
Net Zero Tracker stats

HLEG 2

Interim targets are important because they are a signal of intent to act immediately, which, if delivered on, can help shrink the total amount of emissions that flow into the atmosphere over time. Of the entities with net zero targets, most — but not all — regions have set interim targets, while only around half of cities and companies have done so. Looking at all entities, the portion of those with targets has increased for cities (from 8% to 10%) and companies (from 16% to 20%) while remaining unchanged for regions at 11% compared with 12 months ago.

HLEG 2 1

When it comes to coverage across the value chain, only a minority of companies include the full scope of their emissions within their net zero targets. Coverage is usually divided into scopes: scopes 1 &amp; 2 cover direct emissions and emissions from energy use respectively, while scope 3 covers emissions from all other aspects of a companies’ existence. Scope 3 emissions are the key emissions source for many companies, often accounting for over 90% of their emissions footprint. However, only a minority of companies with net zero targets explicitly cover scope 1, 2 and 3 emissions in their targets. Around a quarter of companies with net zero targets don’t currently specify the coverage at all - a worrying feature which recurs in other aspects of disclosure, too.

3. Using voluntary credits

HLEG recommendation 
<ul><li dir="ltr">Non-state actors must prioritise urgent and deep reduction of emissions across their value chain. High integrity carbon credits in voluntary markets should be used for beyond value chain mitigation but cannot be counted toward a non-state actor’s interim emissions reductions required by its net zero pathway.</li></ul>
<ul><li dir="ltr">High-integrity carbon credits are one mechanism to facilitate much-needed financial support towards decarbonizing developing country economies. As best-practice guidelines develop, non-state actors meeting their interim targets on their net zero pathway are strongly encouraged to balance out the rest of their annual unabated emissions by purchasing high-integrity carbon credits.</li><li dir="ltr">A high-quality carbon credit should, at a minimum, fit the criteria of additionality (i.e. the mitigation activity would not have happened without the incentive created by the carbon credit revenues) and permanence.</li></ul>
 
Net Zero Tracker stats

HLEG 3

As with coverage (Recommendation 2, above), our tracking shows a substantial number of entities that have not yet specified whether and how they intend to use credits, making it impossible to assess the real ambition level of their plans. Compared with 12 months ago, we see no significant improvements on either the transparency about the potential use of credits or the percentage of companies that have committed not to use any credits.

4. Creating a transition plan

HLEG recommendation
Non-state actors must publicly disclose comprehensive and actionable net-zero transition plans which indicate actions that will be undertaken to meet all targets, as well as align governance and incentive structures, capital expenditures, research and development, skills and human resource development, and public advocacy, while also supporting a just transition. Transition plans should be updated every five years and progress should be reported annually.
 Net Zero Tracker stats

HLEG 4

Without a plan, a pledge is simply an aspiration without a means to achieve it. And if that plan is not published, citizens, customers, and investors cannot know how net zero will be achieved nor how they can contribute. Fairly uniformly across the entities we track, just under two thirds of those with a target have published their plan for achieving the target. We see a clear increase compared with 12 months ago for cities (from 7% to 12% of all cities) and companies (15% to 24% of all companies) while the share of regions with a transition plan remains at 9% of all regions.

5. Phasing out fossil fuels

HLEG recommendation
All net-zero pledges should include specific targets aimed at ending the use of and/or support for fossil fuels in line with IPCC and IEA net-zero greenhouse gas emissions modelled pathways that limit warming to 1.5°C with no or limited overshoot, with global emissions declining by at least 50% by 2030, reaching net zero by 2050. 
<ul><li dir="ltr">The transition away from fossil fuels must be just for affected communities, workers and all consumers to ensure access to energy, and avoid transference of fossil fuel assets to new owners.</li><li dir="ltr">The transition away from fossil fuels must be matched by a fully funded transition toward renewable energy.</li></ul>
Commentary
The Net Zero Tracker does not yet systematically track whether entities are committed to phasing out fossil fuels. However, a literature review presented in a <a href="https://www.iisd.org/publications/report/navigating-energy-transitions">recent study by IISD</a> has shown that oil and gas sector companies have shown little, if any, progress towards transitioning their business models away from fossil fuels. We will aim to introduce this indicator for all companies before the end of 2022.

6. Aligning Lobbying and Advocacy

HLEG recommendation
Non-state actors must align their external policy and engagement efforts, including membership in trade associations, to the goal of reducing global emissions by at least 50% by 2030 and reaching net zero by 2050. This means lobbying for positive climate action and not lobbying against it.



Commentary
The Net Zero Tracker has to date not provided an indication as to whether a net zero entities’ lobbying and advocacy align with net zero. Other established initiatives such as <a href="https://influencemap.org/">Influence Map</a> provide excellent information on this topic.

7. People and Nature in the Just Transition

HLEG recommendation 
<ul><li dir="ltr">As part of their net-zero plans, businesses, cities and regions with material land-use emissions must achieve and maintain operations and supply chains that avoid the conversion of remaining natural ecosystems – eliminating deforestation and peatland loss by 2025 at the latest, and the conversion of other remaining natural ecosystems by 2030.</li></ul>
<ul><li dir="ltr">Financial institutions should have a policy of not investing or financing businesses linked to deforestation and should eliminate agricultural commodity-driven deforestation from their investment and credit portfolios by 2025, as part of their net-zero plans.</li></ul>
Commentary
The Net Zero Tracker does not include systematic information on entities’ commitments to end deforestation or other targets related to nature and land use. We will seek to add these in the future.

8. Increasing transparency and accountability

HLEG recommendation 
<ul><li dir="ltr">Non-state actors must annually disclose their greenhouse gas data, net-zero targets and the plans for, and progress towards, meeting those targets, and other relevant information against their baseline along with comparable data to enable effective tracking of progress toward their net-zero targets.</li><li dir="ltr">Non-state actors must report in a standardised, open format and via public platforms that feed into the UNFCCC Global Climate Action Portal to address data gaps, inconsistencies and inaccessibility that slow climate action.</li><li dir="ltr">Non-state actors must have their reported emissions reductions verified by independent third parties. Special attention will be needed to build sufficient capacity in developing countries to verify emission reductions.</li><li dir="ltr">Disclosures ought to be accurate and reliable. Large financial and non-financial businesses should seek independent evaluation of their annual progress reporting and disclosures, including opinion on climate governance, as well as independent evaluation of metrics and targets, internal controls evaluation and verification on their greenhouse gas emissions reporting and reductions.</li></ul><div> </div><div>Net Zero tracker stats</div>

HLEG 8

This is an area in which cities and regions, in particular, have much further progress to make. Our tracking shows that over half of cities with net zero pledges currently have no form of reporting mechanism. Over three quarters of major companies do, but this still leaves a substantial fraction without any form of public transparency about progress.

9. Investing in just transitions

HLEG recommendation
To achieve net zero globally, while also ensuring a just transition and sustainable development, there needs to be a new deal for development that includes financial institutions and multinational corporations working with governments, Multilateral Development Banks and Development Finance Institutions to consistently take more risk and set targets to greatly scale investments in the clean energy transition in developing countries.





 
Net Zero Tracker stats

HLEG 9

The Net Zero Tracker does not systematically record entities’ investments in the just transition. However, we do register whether or not published net zero pledges and plans refer to justice in equity. Across cities, regions, and companies, just a small fraction do.

10. Accelerating the road to regulation

HLEG recommendation 
<ul><li dir="ltr">In order to ensure rigour, consistency and competitiveness, regulators should develop regulation and standards in areas including net-zero pledges, transition plans and disclosure, starting with high-impact corporate emitters, including private and state-owned enterprises and financial institutions.</li><li dir="ltr">The challenge of fragmented regulatory regimes should be tackled by launching a new Task Force on Net Zero Regulation that convenes a community of international regulators and experts to work together towards net zero.</li></ul>
Commentary
Our data shows that the vast majority of non-state entities do not yet meet the minimum criteria for net zero targets outlined by the HLEG. Perhaps even more worryingly, a large number of publicly-listed companies still lack net zero targets. Governments should urgently develop and implement robust regulation around corporate climate targets to level the playing field and ensure that companies can be held accountable. Regulatory measures should not just cover publicly-listed firms, but also private companies for reasons we expand on in our recent report <a href="https://zerotracker.net/analysis/everybodys-business-private-companies-net-zero-blind-spot">Everybody’s Business: The net zero blind spot</a>.
 Governments also need to remove or reform existing regulations which hamper ambitious action at all levels of society. The <a href="https://climatechampions.unfccc.int/wp-content/uploads/2022/09/R2Z-Pivot-Point-Report.pdf">Pivot Point</a> report from the High-level Climate Champions and partner organisations outlines the ‘road to regulation’ in more detail.

Evaluating how regions, cities and large companies are tracking against the recent UN Expert Group's recommendations on the net zero targets of non-state entities.

Recommendations and current realities

Everybodys Business Net Zero Blind Spot

In recent years the emission-cutting plans of major publicly-listed companies have received an increasing amount of attention. Much of this focuses on companies’ targets for net zero emissions, which is now the dominant framing that many entities, corporate and public sector, use for decarbonisation pledges and plans. 

By comparison, the plans of major private companies receive very little attention. But private companies, accountable only to their owners, and with less regulatory scrutiny and oversight, make up a large share of the world economy: the aggregate annual revenue of the 100 largest private companies in the world amounts to over $4 trillion, almost 5% of the global economy.
In this report, we pull back the curtain on the world’s biggest private companies and ask how their pledges and plans for net zero compare to their publicly-listed counterparts. The comparison includes both the existence and robustness of a net zero target: for example, whether the company has: 
<ul><li>set interim targets </li><li>published a plan outlining how it will reach net zero </li><li>committed to report its progress annually </li><li>is clear about the scopes of emissions contained in its target, and planned use of offsets. </li></ul>

Everybodys Business Infographic 18 Oct

Data on the world’s biggest 100 publicly-listed companies was drawn from the <a href="https://zerotracker.net/" target="_blank" rel="noreferrer noopener">Net Zero Tracker</a> database. We then used a list of the biggest 100 private companies and applied the same criteria to their targets, where they exist, that we use in the Tracker.
On almost all net zero quantity and quality metrics we investigated, we find that private companies are trailing their public counterparts. 
Less than half as many have set net zero targets (32 of the top 100 private firms compared with 69 of the top 100 publicly-listed companies). Of those that have set a net zero target, only 13% (4) have published a plan to reach it, versus 73% (50) of their publicly-listed counterparts. The private companies that have set a net zero target are less likely to include Scope 3 emissions within it, are less likely to have set interim targets, and give less clarity on their planned use of offsets.
The situation is even more concerning when considered in the context of other <a href="$PRIMARY_SITE_URL/analysis/net-zero-stocktake-2022" target="_blank" rel="noreferrer noopener">findings by the Net Zero Tracker</a> and others showing that overall, while corporate target-setting continues at speed, the targets of publicly-listed companies themselves show insufficient rigour and integrity. Considered collectively, the net zero performance of major private companies in this report is seriously deficient compared against a benchmark that is itself full of shortcomings.
In short, the lack of integrity of the largest private firms’ net zero pledges is a $4.3 trillion blind spot that is likely to gain much greater interest in the coming years. Constituencies that take an active interest in the decarbonisation plans of publicly-listed companies are likely to bring more scrutiny to bear on their privately-held counterparts. The value of this Net Zero Tracker analysis lies in providing a glimpse into the dimly-lit world of private firms, and in presenting a baseline for future analysis — by ourselves or others — to compare against it. We also hope it supports efforts to grow awareness across academia, civil society and policymaking centres that we need more than just transparency to address the stark net zero disparities that exist between publicly-listed and privately-held companies.

Private Firms Data Snapshot 17 10 22

Acknowledgements
This analysis was led by John Lang, who wrote the report with Richard Black. Substantive contributions were made by Lyndsey Fowks, Takeshi Kuramochi, Camilla Hyslop, Tom Hale, Nick Hay, Zhi Yi Yeo, Frederic Hans, Peter Chalkley, Steve Smith and Angel Hsu. 
The private and publicly-listed firm data collection was led by Camilla Hyslop and Lyndsey Fowks. 
Reference
Everybody's Business: The Net Zero Blind Spot, Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. October, 2022.

Publicly-listed companies are committing to net zero, but privately-held firms are largely not.

Everybody's Business: The net zero blind spot

Net Zero Stocktake Report 2022

Net zero is the dominant lens through which countries, states and regions, cities and companies approach decarbonisation. With global coverage of net zero nearly universal at the national level now, the big question is whether a sufficient proportion of targets across the wider economy acquire measures of robustness quickly enough to keep the Paris Agreement 1.5°C target within reach.
The Net Zero Stocktake 2022 report — our first comprehensive analysis since Taking Stock over a year ago — shows that target-setting momentum continues and measures of quality are improving, but also that an alarming lack of credibility pervades the entire landscape.

Global coverage skinny

For this report, we drew upon our Net Zero Tracker database of 4,000+ entities, of which we found that 1,181 (including the EU) have net zero targets. Courtesy of the fact that 19 members of the G20 have now signed on, the net zero targets of national governments represent the overwhelming bulk of the global economy and greenhouse gas emissions.

Report highlights

<ul><li>Encouragingly, national net zero targets set in domestic legislation or policy documents have surged — from 10% of total GHG coverage in December 2020 to 65% in June 2022.</li><li>As countries keep setting - and strengthening - commitments, the spotlight falls on those companies (65%), regions (84%) and cities (80%) that are yet to pledge net zero targets.</li><li>Worryingly, more than 75% of national and sub-national governments still do not transparently specify whether they intend to use external offset credits to meet their net zero targets. </li><li>Using the Race to Zero ‘starting line’ criteria as our benchmark—a minimum threshold that is necessary but by no means sufficient—we found that fewer than one-fifth of net zero targets set by national and sub-national governments currently meet minimum procedural standards of robustness. </li></ul>

NZS Governments status and coverage

NZS governments offsets

<ul><li>More than one-third of world’s largest publicly traded companies now have net zero targets, up from one-fifth in December 2020. However, 65% of corporate net zero targets do not yet meet minimum procedural standards of robustness.</li><li>Nearly 40% of the companies intend to use external offsets (carbon credits) to achieve net zero, with less than 2% explicitly ruling out their use. That leaves close to 60% that have not specified whether or not they plan to rely on offsetting.</li><li>Only 38% of companies claim to cover all Scope 3 (value chain) emissions.</li></ul>

NZS companies emission scopes

<ul><li>The global North has set the majority of sub-national targets. Net zero has not yet spread widely beyond high-income countries in North America, Europe, and Asia.</li><li>The number of large cities with net zero targets has doubled since December 2020 — from 115 to 235 — but more than 900 large cities still lack a net zero target.</li></ul>

NZS Global region

<ul><li>The Fossil Fuels industry has the second highest percentage of net zero targets (49%) among those industries with more than ten companies in the Forbes 2000 list. The sectors with the third and fourth highest percentages, respectively, are also GHG-intensive: the Materials industry (e.g. steel and cement) and Transportation Services (e.g. airlines and shipping). </li></ul>

NZS company sectors

<ul><li>Among the 702 Forbes 2000-listed companies with net zero targets, the largest *number* of companies are headquartered in the US (210), followed by Japan (89), the UK (57), France (40) and Germany (33).</li></ul>

NZS G7 companies

<ul><li>The recent wave of corporate long-term target setting has been accompanied by an increasing number of analyses and methodologies to assess or verify such targets. We outline a selection of these, including the <a href="https://sciencebasedtargets.org/net-zero" target="_blank" rel="noreferrer noopener">SBTi Net-Zero Standard</a> and the <a href="https://newclimate.org/news/qa-with-the-authors-corporate-climate-responsibility-monitor-2022" target="_blank" rel="noreferrer noopener">Climate Corporate Responsibility Monitor (CCRM)</a>.</li><li>As scrutiny grows and the shadow of regulation lengthens, increasingly those companies without credible targets should become outliers. Civil society, researchers, and policymakers are getting better at separating genuine from greenwash, so gone are the days when misleading net zero targets will not be found out.</li></ul>

As our analysis shows, overall the transparency and integrity of existing net zero pledges are far from sufficient to ensure a timely transition to global net zero GHG emissions to achieve the Paris Agreement’s long-term temperature goal. Across the board, an enormous need for greater standardisation and operationalisation of net zero targets is needed. 
The UN Secretary-General’s High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, launched in March 2022, provides an important opportunity to accelerate the robust operationalisation of net zero targets at the sub-national and corporate level. 
For cities, regions, and countries in the Global South, capacity building and access to finance is going to be critical for transforming net zero pledges into concrete commitments and plans. For the private sector, regulation will ultimately be needed. Indeed, disclosure requirements are either currently mandatory or phasing in across the EU, the UK, and Japan, and are proposed in both the US and China. 
At the same time, the more voluntary mobilisation, <a href="https://climatechampions.unfccc.int/" target="_blank" rel="noreferrer noopener">orchestration</a>, and standardisation efforts that characterise the current net zero ecosystem can play an important role by forging leadership coalitions that build support for stronger regulations in the future. 
When considering net zero purely from a quantity perspective, there is no question the climate supertanker is turning. Yet the lack of credible, quality targets raises serious doubts if that turn can be sustained.

Net Zero Stocktake 2022

Post COP26 snapshot 25 11 21

Notes and figures 
Net zero coverage — Countries
When including the net zero target of the European Union as a whole (not just the targets of its individual countries) net zero coverage is slightly higher across the board as of 16 November 2021: 92% for emissions, 93% for GDP and 86% for population.
Planned use of offsets — All entities
The use of offsets (carbon credits) is ill-defined across all entity targets, with 91% of country targets, 78% of regional targets, 79% of city targets and 48% of public company targets failing to specify if - and how - offset credits will be used.
Almost 43% of the world’s largest 632 public company targets, as measured by revenue, plan to use offsets — but two-thirds of that 43% fail to specify any conditions on the use of offsets.
Almost 10% of companies, as measured by revenue, have ruled out using offsets to reach their net zero targets. 
Coverage by scope — Companies
Only 32% of corporate net zero targets cover the entirety of Scope 3 emissions — and 25% of targets only partially cover Scope 3.
Governance indicators — All entities Interim targets indicator: Countries display 100% because all nations with net zero targets have submitted Nationally Determined Contributions (NDCs) with an interim mitigation target. We will be reviewing the value of this country indicator in the near future. 
Green shoots of corporate momentum
Companies setting net zero targets meeting 'minimum procedural standards' have increased in the last year almost two-fold by number (from 110 to 207) and almost four-fold (from $2,148bn to $8,049bn) as measured by revenue. 
Companies meeting both minimum standards and leadership practices — as defined by the UNFCCC's Race to Zero campaign — has doubled in the last year by number (from 11 to 22, and increased 16-fold (from $82bn to $1,345bn) as measured by revenue
 
Data and acknowledgements
Explore our <a href="https://www.zerotracker.net/methodology/">methodology</a> to find out how we collect information on net zero targets. To access the specific data used for this snapshot, please <a href="mailto:hello@zerotracker.net" target="_blank" rel="noreferrer noopener">email us</a>, or you can download the most up-to-date data set from our homepage. 
The above graphic was created by the Net Zero Tracker's project lead <a href="https://twitter.com/johnlangab" target="_blank" rel="noreferrer noopener">John Lang</a>. 
If referencing for external purposes, please cite as follows: For media: Post-COP26 Snapshot, Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. November, 2021.
For academic publications: Thomas Hale, Takeshi Kuramochi, John Lang, Brendan Mapes, Steve Smith, Ria Aiyer, Richard Black, Mirte Boot, Peter Chalkley, Frederic Hans, Nick Hay, Angel Hsu, Niklas Höhne, Silke Mooldijk, Tristram Walsh. 'Post-COP26 Snapshot', Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. 2021. 
This analysis and other Net Zero Tracker outputs wouldn't be possible without the following volunteers:
<ul><li>Shiemaa Ahmed</li><li>Fatima Arif</li><li>Nina Bengtsson</li><li>Barasha Borthakur</li><li>Samuel Boyer</li><li>Annabel Chantry</li><li>Mia Clement</li><li>Judith Condor-Vidal</li><li>Matthew Doran</li><li>Adriana Elera</li><li>Julian Gonzales</li><li>Manu Gupta</li><li>Jonathan Heale</li><li>Joe Kearney</li><li>Kara Keenan-Wilson</li><li>Maria Lemos Gonzalez</li><li>Amy Leung</li><li>Harry Linehan-Hill</li><li>Lucy Lyons</li><li>Lucy Main</li><li>Esmé McMillan</li><li>Nadia Merghani</li><li>Michelle Midzi</li><li>Sasha Mills</li><li>Joy Nkosi</li><li>Pippa Noble</li><li>Lizeth Palencia</li><li>Aiminayanate Pepple</li><li>Lore Purroy</li><li>Carol Serban</li><li>Bridget Stuart</li><li>Elizabeth Tatham</li><li>Leah Tillmann-Morris</li><li>Maria Torres Santeli Jose</li><li>Allan Torres</li><li>Irene Trung</li><li>Michelle Viotti</li><li>Kun Yan</li><li>Lina Yassin</li></ul>

Now that net zero is almost universal, the era of integrity begins.

Post-COP26 Snapshot

Analysing the quantity, quality and momentum of net zero targets in G20 nations, regions, cities and companies.

G20 Analysis Oct 2021 FINAL

Note: When including the net zero target of the European Union as a whole (not just the targets of its individual countries) net zero coverage is slightly higher across the board as of 27 October 2021: 81% for emissions, 82% for GDP and 61% for population. 
The 'G20: Net zero stocktake', presented by <a href="https://twitter.com/johnlangab" target="_blank" rel="noreferrer noopener">John Lang</a>, is the Net Zero Tracker consortium's first analysis. It builds on ECIU and Oxford’s <a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets" target="_blank" rel="noreferrer noopener">Taking Stock</a> report and the <a href="https://newclimate.org/2020/10/22/navigating-the-nuances-of-net-zero-targets/" target="_blank" rel="noreferrer noopener">Navigating the Nuances of Net Zero</a> report by the NewClimate Institute and Data-Driven EnviroLab, the first systematic analyses of global net zero commitments across countries, sub-national governments and major companies. 
We reference the UNFCCC's Race to Zero 'starting line' criteria in this analysis. It can be explored in detail <a href="https://racetozero.unfccc.int/wp-content/uploads/2021/04/Race-to-Zero-EPRG-Criteria-Interpretation-Guide-2.pdf" target="_blank" rel="noreferrer noopener">here</a>.
Explore the Net Zero Tracker <a href="$PRIMARY_SITE_URL/methodology">methodology</a> to find out about how we collected data. To access the data set, please download from our home page or <a href="mailto:hello@zerotracker.net" target="_blank" rel="noreferrer noopener">email us</a>. If using for external purposes, please cite as follows: For media: G20: Net Zero Stocktake, Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. October, 2021.
For academic publications: Thomas Hale, Takeshi Kuramochi, John Lang, Brendan Mapes, Steve Smith, Ria Aiyer, Richard Black, Mirte Boot, Peter Chalkley, Frederic Hans, Nick Hay, Angel Hsu, Niklas Höhne, Silke Mooldijk, Tristram Walsh. 'G20: Net Zero Stocktake', Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. 2021. 
This analysis owes a debt of gratitude to the following volunteers:
<ul><li>Shiemaa Ahmed</li><li>Fatima Arif</li><li>Nina Bengtsson</li><li>Barasha Borthakur</li><li>Samuel Boyer</li><li>Annabel Chantry</li><li>Mia Clement</li><li>Judith Condor-Vidal</li><li>Matthew Doran</li><li>Adriana Elera</li><li>Julian Gonzales</li><li>Manu Gupta</li><li>Jonathan Heale</li><li>Joe Kearney</li><li>Kara Keenan-Wilson</li><li>Maria Lemos Gonzalez</li><li>Amy Leung</li><li>Harry Linehan-Hill</li><li>Lucy Lyons</li><li>Lucy Main</li><li>Esmé McMillan</li><li>Nadia Merghani</li><li>Michelle Midzi</li><li>Sasha Mills</li><li>Joy Nkosi</li><li>Pippa Noble</li><li>Lizeth Palencia</li><li>Aiminayanate Pepple</li><li>Carol Serban</li><li>Bridget Stuart</li><li>Elizabeth Tatham</li><li>Leah Tillmann-Morris</li><li>Maria Torres Santeli Jose</li><li>Allan Torres</li><li>Irene Trung</li><li>Michelle Viotti</li><li>Kun Yan</li><li>Lina Yassin</li></ul>

The Net Zero Tracker's maiden analysis shines a light on G20 entities.

G20: Net Zero Stocktake

<title>Analysis | Net Zero Tracker</title>

Our latest on the quality of net zero targets across nations, regions, cities and the world's largest companies.

Analysis

Carbon Competitiveness: India at the Net Zero–Trade Nexus

Net Zero Tracker Partners