According to a new inventory of net-zero efforts in the public and private sectors, corporate plans to reduce greenhouse gas emissions fall short of what is required to combat climate change, with “major credibility gaps” discovered among the world’s largest companies.
Approximately half of the Forbes 2000 largest corporations have yet to announce plans to achieve net-zero emissions — the point at which greenhouse gas emissions are negated by drastic reductions in output as well as methods to absorb atmospheric carbon dioxide. According to Net Zero Tracker’s annual report, two-thirds of the 702 companies with a net-zero target have not stated how they intend to achieve that goal.
Net Zero Tracker, which is run in part by the UK-based Energy and Climate Intelligence Unit (ECIU) and the University of Oxford, evaluates publicly available data for approximately 200 countries as well as large publicly traded companies, including those in the fossil fuels industry.
“We see a lot of issues with credibility, as well as the quality and robustness of these targets,” said report co-author Frederic Hans, a climate policy analyst at the German think tank NewClimate Institute.
Many companies with net-zero targets have set no interim emissions goals for before 2050, which the report called “unacceptably low” if the world is to cut emissions in half in the next eight years, as scientists say is required.
Carbon offsetting, or the purchase of credits for emissions reduced elsewhere, was also prominent among corporate strategies. Despite concerns about a lack of regulation, nearly 40% of the Forbes 2000 companies with a net-zero target plan to use offsets.
To achieve net-zero progress, governments will need to impose legal standards and regulations, according to ECIU co-author John Lang. Companies are currently perplexed about what is expected of them. “They have no idea what information must be disclosed,” he explained.
The United Nations established an expert group last year at its climate summit in Glasgow to develop net-zero standards for the private sector and analyze commitments. The European Union is also working on net-zero reporting standards, which will be adopted in November. Companies cannot count carbon offsets toward net-zero emissions under the current draft text.
“We need top-down, mandatory regulations to guide them,” Lang said. He did not believe the issue could be resolved before the next United Nations climate summit, “COP27,” in Sharm al-Sheikh, Egypt, in November. He believes it “probably cannot be fixed before COP28” in 2023.