November 29, 2023
Source: RMI
Photo / Image Source: Unsplash,
Snapshot of corporate climate action: 2023
Assessing the implications of corporate climate action globally requires looking at several layers of data to understand where companies stand and how patterns change over time.
Provides a snapshot of the current status of climate action across global private sector companies. Gathering and reporting emissions data is typically the first meaningful step a company takes toward climate target setting and action. Today, more than 23,000 companies, representing more than 50 percent of global market capitalization, report emissions data to CDP, a nonprofit organization that runs the global disclosure system for companies to manage their environmental impacts.
The next step is setting climate action goals. More than 10,000 companies have publicly announced these goals in one form or another. Although many of these goals are not independently verified, among the world’s largest 2,000 companies, more than half have set net-zero targets according to Net Zero Tracker. In the past 16 months, the number of companies with these aims has risen 40 percent and now represents 66 percent of the annual revenue of the world’s largest 2,000 companies. At the same time, nearly 8,000 companies, representing over a third of the global economy by market capitalization, have either committed to science-based targets or had such targets independently verified through the Science-Based Targets Initiative (SBTi). RMI’s dataset of corporate climate action targets includes more than 7,500 companies, and indicates that commitments cover 56 percent of 2021 emissions overall, but with wide variation across sectors.
The final stage — translating those climate targets into action — has progressed steadily, but much work remains to be done to hold companies accountable to their commitments.
The Net Zero Company Benchmark Assessment produced annually by Climate Action 100+ tracks climate action in depth for a sample of 150 companies identified as playing key roles in the transition to net zero. This reporting indicates that a majority of companies disclose medium-term greenhouse gas reduction targets and corresponding actions. But only 32 percent of these companies specify how much capital they plan to allocate to climate solutions in the future, and only 2 percent have committed to phasing out CAPEX in unabated carbon intensive assets. Similarly, according to Net Zero Tracker, just 4 percent of the companies with net-zero targets meet the minimum criteria laid down by the UN’s Race to Zero campaign, which includes covering all emissions, reducing them immediately, and issuing timely progress updates.
Does your company have a climate change plan? Is it complaint with current climate laws? Why? Why not?
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