Despite external crises and ESG backlash, net zero commitments are up six percentage points this year among the world’s largest companies.
Climate Impact Partners, a leading global carbon finance organization, today released the sixth annual study assessing the climate commitments of Fortune Global 500 companies. The latest report reveals that the world’s largest companies are quietly setting more significant, ambitious targets: 45% of companies plan to be net zero by 2050, up from 39% last year and dramatically up from 8% since 2020.
“Companies may be continuing their climate action quietly, but we should be celebrating this increase in corporate commitments loudly,” said Sheri Hickok, CEO of Climate Impact Partners. “The top earning companies know that despite economic headwinds and ESG backlash, tackling the climate crisis is critical to future-proofing their businesses. Companies need to act now, setting more ambitious targets and using vital tools such as carbon credits to accelerate progress. The Fortune Global 500 can help lead the way to turn up the volume on climate action and drive impact today.”
The report examined the type of climate commitments being made, as well as how companies are planning to utilize tools like carbon credits to reach their goals:
Despite ESG politicization, North America has seen the biggest increase in companies with significant targets.
Companies today are still pursuing ambitious climate targets in spite of economic uncertainty and intensified ESG backlash. In North America, companies are stepping into action - 79% have a significant commitment by 2050. This is up from 73% last year. In Asia, 46% of companies have a significant commitment by 2050, up from 45% last year. In Europe, where over 95% of companies already have a significant commitment, there was no growth in the number of companies with one.
More companies are planning to use carbon credits to reach their climate targets.
42% of companies explicitly state they will use carbon credits to meet a carbon neutral or net zero target. This is up from 40% last year. Purchasing carbon credits and compensating for residual emissions offers companies a competitive advantage. By supporting verified carbon projects, businesses can enhance stakeholder communication, foster internal climate support and meet their climate objectives. Credits also enable companies to direct funds to impactful climate projects, often located in regions with a lack of investment in climate solutions.
Companies with carbon credits as part of their climate action plan are more likely to have more rigorous reduction targets.
Companies committed to using carbon credits are twice as likely to have a near term Science Based Target and three times more likely to have a net zero target for their entire value chain.
By putting a price on carbon in the business through carbon credits, companies pursuing carbon neutrality and taking action now are almost twice (1.7x) as likely to have near term Science Based Targets across the entire value chain (including Scope 3) than companies that are not carbon neutral or do not plan to be by 2030.
To view the full report and methodology follow this link.
Companies may be continuing their climate action quietly, but we should be celebrating this increase in corporate commitments loudly. The Fortune Global 500 can help lead the way to turn up the volume on climate action and drive impact today.
