Net zero targets among world's largest companies double, but credibility gaps undermine progress

Net zero is a corporate norm, with almost two-thirds (65%) of the annual revenue of the world’s largest 2000 companies now covered by a net zero target.

12 JUN 2023

  • A striking rise in targets enshrined in national legislation or policy in 2.5 years, from 7% to 75%, reinforces that net zero has moved from ambition to implementation.

  • Four UNFCCC member states, 439 states & regions in the top 25 emitting countries, 766 major cities, and 734 of the largest publicly-listed companies still lack emissions reduction targets.

  • On measures of integrity, there remain very limited signs of improvement in national, subnational and company net zero strategies over the past year.

  • 67% of fossil fuel firms have net zero commitments, but an absence of oil & gas phase-out plans leaves those targets misaligned with the scientific and policy consensus.

  • Increasing convergence across voluntary net zero standards, guidelines and accountability frameworks provides important guidance and good practice for policy makers to put net zero on the road to regulation.

Bonn, 12th June 2023: The globally-agreed mission to curtail climate change will be impossible unless national & sub-national governments and the largest companies urgently strengthen their targets, reports the Net Zero Tracker (NZT)’s annual Net Zero Stocktake.

The NZT Stocktake shows that in the last 2.5 years a clear consensus to curtail GHG emissions to net zero has been reached, with the bulk of national governments setting commitments. National net zero targets now collectively represent:

  • 88% of global GHG emissions (up from 61% in December 2020).

  • 92% of global GDP (up from 68% in December 2020).

  • 89% of the global population (up from 52% in December 2020).

With net zero now mainstream across countries, the quantity of national targets and their coverage of GHG emissions plateaued over the last year. The NZT analysis shows that in the last 12 months many national governments have shifted their focus to formalising existing informal commitments - with a massive shift in targets up the governance curve, from pledges into domestic policy:

  • 72 national net zero targets, including US, UK, Nigeria & Japan, are either enshrined in legislation or outlined as a goal in policy documents.

  • The 72 targets account for about 75% of total GHG emissions covered by national net zero targets overall; a massive increase from less than 5% in Dec 2020.

The analysis shows that a significant share of subnational and corporate entities, both at the global level and within the G7, still lack any emission reduction targets. The quantity of cities, states and regions committing to net zero is increasing, but only incrementally.

  • 37% of the world’s largest companies have not set any kind of GHG mitigation target.

  • US companies trail their EU counterparts on net zero target setting, with 49% and 79% of companies represented by net zero targets respectively in those regions.

  • Only 252 large cities have set net zero targets, which together represents 37% of the 2.1 billion people living in large cities. (1)

  • 41% of global states & regions do not have any mitigation targets, compared with the vast majority of states & regions in the G7 (80%), EU (75%) and US (72%) that do.

  • Only around a 40-50% share of the national emissions of the high emitting G7 countries and China, is covered by states and regions’ net zero targets. (2)

John Lang, Project Lead, the Net Zero Tracker (ECIU), said:

“The political calculus has changed for sub-national regions and companies in the now 72 nations with net zero targets in law or policy. Ignore the shadow of regulation and choose economic insouciance, or jump on the transition train that the US Inflation Reduction Act, the EU Net Zero Industry Act and other net zero-supporting policies are driving.

“Real-world realities have not yet been reflected in the robustness of regional, city and company net zero targets. More entities need to sign up to net zero, but those that have pledged need only look at the direction of travel to impel them to deliver.”

Corporate net zero: dramatic rise in quantity, but grave concerns on credibility.

However, despite the overall inertia within certain non-state entities, the Stocktake shows the potential for the corporate sector to lead renewed momentum on climate action, with the number of company targets more than doubling in 2.5 years.

  • 929 companies from the Forbes 2000 list have set net zero targets; up from 417 in December 2020, and 702 in June 2022.

  • The aggregate annual revenue covered by net zero targets has increased from $3.8 trillion in December 2020 to $26.4 trillion today, equivalent to two thirds of total annual revenue of the Forbes Global 2000.

Despite the progress in corporate target-setting, the NZT warns that the integrity of company emission reduction targets should urgently improve if they are to be met on time.

  • 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). (3)

  • Only 37% of corporate net zero targets fully cover scope 3 emissions (on a self-reporting basis). (4)

  • Only 13% of corporate net zero targets specify quality conditions under which any offsets would be used.

  • A rising number of companies (26%) plan to use carbon dioxide removal (CDR) in some way.

Dr. Takeshi Kuramochi, Senior Climate Policy Researcher at NewClimate Institute, said:

“We find that the overall robustness of companies’ net zero targets remains low and collective progress too slow. To become true climate leaders, companies must reflect seriously on the UN Expert Group’s recent markers of credibility and other Paris-aligned standards, and urgently update their currently weak plans with robust implementation strategies.”

Net zero commitments are mainstream in the fossil fuel sector, but the targets are deeply misaligned with UN credibility standards

The Stocktake assessed one of the key political issues in the lead-up to the UAE-hosted COP28, i.e. the decarbonisation commitments of fossil-fuel producing companies. Despite the greenwashing criticism directed at the sector, the number of the world’s largest 114 fossil fuel companies with net zero targets increased sharply to 75 in May 2023 - from 51 in June 2022. However, the following key credibility gaps lie within the sector’s climate targets:

  • Most of the 75 fossil fuel company net zero targets do not fully cover or do not clarify coverage of Scope 3 emissions (the largest scope of emissions by far for fossil fuel companies), making them largely meaningless.

  • No fossil fuel companies are making the necessary commitments to fully transition away from fossil fuel extraction or production, despite the clear UN guidelines that - to be credible - net zero targets must include "specific targets aimed at ending the use of and/or support for fossil fuels." (5)

Dr. Steve Smith, Executive Director of Oxford Net Zero and CO2RE, said:

“Expecting fossil fuel companies to go net zero might seem like asking turkeys to vote for Christmas. But even in a fossil-free world we will need clean energy for all and the ability to sequester residual carbon. People in fossil fuel companies have the skills to build the future. By falling prey to the status quo, these companies are either delaying the net zero transition or losing out on the industries of tomorrow and increasingly today.”

Professor Thomas Hale, Blavatnik School of Government, University of Oxford said:

“Though the vast majority of countries have now set a net zero target, the lack of similar targets in parts of the private sector and in local and regional governments hamstrings nations’ ability to deliver on those goals. Implementation requires all hands on deck. By incentivizing and supporting companies and sub-national governments to set rigorous net zero targets and plans, countries can boost the credibility of national climate goals.”

Global voluntary standards ecosystem converges on net zero credibility

The NZT also evaluated the evolving voluntary standards landscape, particularly the convergence of the ecosystem of voluntary standards, guidelines and accountability frameworks, which have emerged to steer targets and plans toward the requirements of science. (6) The report concludes that broadly, accountability standards converge at the high-level, but further convergence is needed across specific areas, including detailed criteria and requirements on:

  • Setting emission reduction targets in line with the 1.5°C temperature limit.

  • The use of offsetting claims.

  • Fossil fuel financing within a net zero strategy.

  • Defining equitable target-setting for communities affected by net zero transitions.

  • Alignment of climate action with lobbying and advocacy via trade associations.

The Stocktake re-emphasised the substantial gap in climate regulation, which is currently mainly limited to disclosure, which must be filled to hold non-state entities to account for their claims.

Late last year a report commissioned by UN Secretary-General António Guterres made explicit that in order to be credible, a net zero pledge must include short-term interim targets, strict conditions on use of offset credits, a planned halt to fossil fuel use and a transition to renewable energy, among other measures.

Camilla Hyslop, Data Lead, Net Zero Tracker (University of Oxford): said:

“Mr Guterres’s report has left no room for doubt on what ‘good net zero’ looks like. It is fast becoming the yardstick against which pledges are measured. And entities that are stuck in the past paradigm where merely making a pledge would garner you credit are being exposed. If an entity wants its net zero commitment to be taken seriously, it has to be matching words with deeds.”

Alexis McGivern, Net Zero Standards Manager, Oxford Net Zero said:

“Clear consensus has emerged on what is required for robust net zero targets, which serves as a guiding star for both commitments and implementation. No company, city or region can any longer claim not to know what a credible target looks like. Several of these initiatives have also made it clear that fossil fuel phase-out is a mandatory part of any credible net-zero strategy.”

“Using the good practice and areas of consensus within the accountability ecosystem, policymakers now have the tools to shape regulation to create a level playing field enabling companies to accelerate down the pathways to net zero.”

Frederic Hans, Senior Climate Policy Analyst at NewClimate Institute, said:

“We have recently seen a promising convergence on higher-level principles on what constitutes ‘good net zero’ across available guidance. The focus now needs to shift towards achieving convergence on more specific criteria and turning these into practice. This is essential to support policy makers around the globe in setting robust regulation for corporates and to improve the wider accountability system for corporate climate action.”

Professor Angel Hsu, Director of the Data-Driven EnviroLab, said:

“With the UN Climate Secretariat announcing this week at the Bonn intersessional a new ‘Recognition and Accountability Framework’ for non-state actors, we’re seeing amplified focus on the importance of these entities showcasing tangible and credible progress. No longer will cities, regions, or companies be able to claim net-zero, they have to show proof.”


1. 40% of the 2.1 billion people living in 1,170 cities with populations over 500,000 (i.e. ‘large cities’ in the NZT database).

2. The NZT database includes the states & regions in the world’s largest 25 emitting nations.

3. Race to Zero Starting Line & Leadership Practices 3.0. NB this NZT analysis did not include the ‘Persuade’ element, i.e. external policy and engagement.

4. Scope 3 = emissions generated by the use of products and services from company supply chains, plus the lifecycle after a product or service is sold, including ongoing processing, further transport, use and disposal.

5. UN Expert Group on Net Zero Commitments of Non-State Actors.

6. The following five key voluntary standards, guidelines and assessment frameworks were compared in detail: UN High-level Expert Group on the Net Zero Emissions Commitments of Non-State Entities; ISO Net Zero Guidelines; the Race to Zero Starting Line and Leadership Practices 3.0 (2022); the updated SBTi Corporate Net Zero Standard (SBTi, 2023); the updated Corporate Climate Responsibility Monitor methodology (CCRM, 2023) and a summary across 33 initiatives (McGivern, 2022).


Notes to editors:

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.

NZT is an independent research consortium, comprising The Energy & Climate Intelligence Unit (ECIU); Data-Driven EnviroLab (UNC); NewClimate Institute; and Oxford Net Zero.

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.


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