A growing number of the world’s largest companies are setting net zero targets, but nearly all of them could fail to meet these commitments unless they double their emissions reduction rates, according to consulting firm Accenture.
Just over one-third (34 per cent) of Accenture’s list of the world’s top 2,000 largest public and private companies had publicly stated net-zero targets to date, but 93 per cent of them could miss their decarbonisation targets based on current socio-economic trends, Accenture said in a report.
The report, Accelerating Global Companies toward Net Zero by 2050, found that accelerating energy price inflation, supply insecurity and labour shortages are making emissions reduction targets harder to achieve.
“Only 7 per cent of companies are on track to achieve their net-zero targets for Scope 1 and 2 emissions at the observed rates of change. Moving targets to 2050 increases that share just slightly to a mere eight per cent,” Accenture said.
Even in an accelerated scenario – where the pace of emissions reduction is twice as fast until 2030 and then up to five times as fast until 2050 – two fifths of companies will miss their own targets, it said. 22 per cent will fail to hit net-zero by 2050.
Still, the data showed that setting targets works in lowering emissions, which more and more companies are doing.
To date, more than one third of companies on Accenture’s list have net-zero commitments, up 7 percentage points from a year ago. Eighty-four per cent of companies surveyed plan to increase investments in sustainability initiatives by the end of 2022, compared to 80 per cent a year ago.
Additionally, new worldwide renewable energy investment in the first six months of 2022 had amounted to US$226 billion, the highest rise ever recorded for the first half of the year and an indication that demand for clean energy is strong.
“The companies with net-zero targets cut emissions more than those without. Those with more sophisticated targets and measures in place are cutting emissions even faster,” the report said.
A record number of companies had committed to setting science-based targets in June and September 2022, bringing the total up to 237 companies as of October.
Leading companies also treat their carbon, energy and emissions data with the same importance as financial and operational business information, integrating it into everyday decision-making, Accenture said.
“To move at the speed and scale required by science and economics, it will be critical for businesses to develop multiple ‘carbon intelligence’ capabilities at the same time,” said Mauricio Bermudez-Neubauer, global lead for carbon strategy and intelligence at Accenture.
This includes integrating carbon, energy and other sustainability data and insights into financial and operational business information to help drive everyday decision-making, he said.
