New analysis: Half of world’s largest companies are committed to net zero
Significant milestone reached in corporate net zero, but major credibility gap remains
6 NOV 2023
Net Zero Tracker assesses the 1,000th company with a net zero target from the world’s largest 2,000 publicly-listed companies.
66% of the annual revenue of the world’s largest 2000 companies is now covered by a net zero target.
UK backslide on net zero implementation is misaligned with goals of the bulk of the largest UK businesses.
One-third of the world’s largest publicly-listed companies have still not set any form of emissions reduction target.
London, 6th November 2023: The Net Zero Tracker 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.
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.
The aggregate annual revenue covered by net zero targets is $27 trillion.
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:
94% (72/77) of UK-based companies within the Forbes2000 have set net zero targets.
- Only one UK-based company within the Forbes2000 has not set any mitigation target - private equity firm, 3i.
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 High Level Expert Group (HLEG)’s guidance on ensuring the credibility and accountability of net zero pledges by non-state entities. The NZT also ‘signposts’ to other accountability-geared organisations such as Race to Zero.
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:
Only 37% of corporate net zero targets fully cover Scope 3 emissions (on a self-reporting basis).
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.
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).
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
firstname.lastname@example.org / +44 (0) 7378 250 288
About Net Zero Tracker (NZT):
Net Zero Tracker is the most comprehensive and up-to-date database of net zero commitments made by nations, states & regions, cities and major companies. It includes:
all UNFCCC member states and a selected number of territories;
subnational states and regions in the 25 largest emitting countries;9
all cities around the world with populations over 500,000;
Publicly-traded companies that were listed in the Forbes Global 2000 in 2020.10
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.
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.