Corporate climate commitments are improving, but the worst offenders are doing the least
The vast majority of Americans support both corporate transparency on climate as well as federal requirements for corporations to disclose their climate data, from emissions to emission reductions to sustainability programs and climate commitments. But although many corporations are improving on their climate commitments, some sectors are still woefully behind, according to a new report from Just Capital, which tracks companies in the Russell 1000.
The number of corporations pledging to emit net zero emissions by 2050 will more than double from this year to next year, from 102 to 238. On committing to reduce emissions, the numbers rose from 412 to 498, by far the strongest category of commitments.
Corporate commitments to reduce emissions enough to stay under precise global warming targets are far lower, but the gains are still promising. Companies with verified targets by the Science Based Targets Initiative (SBTi) to meet a 2-degree scenario will double between 2022 and 2023, from 25 to 45. On the most ambitious commitment, a verified SBTi 1.5-degree scenario, 83 companies will become verified, a 21% increase year over year.
“The findings show considerable progress,” said Martin Whittaker, CEO of Just Capital. “But as we know there’s hesitancy accepting these commitments at face value. We’ve seen a doubling in net zero commitments, and an increase in science-based targets as well, but these are not necessarily concentrated in industries that are high polluters, which of course is where the action needs to be focused.”
While net zero targets generally have a year as the finish line, they don’t commit to a particular degree reduction of global warming. Whittaker noted that has raised some worries that companies will just wait until the last minute to work toward these commitments and not focus on what they can do right now.
“All of the companies, however, that set a target year for 2050 also had set interim targets — which will be goal posts for stakeholders to assess their progress and push for more change if they’re not making progress,” he added.
The report found that companies in lower-emitting industries like clothing and accessories and personal products had a larger share of 1.5 degree SBTi commitments, while high emitting industries like utilities and oil and gas had almost no aggressive commitments.
“Clothing brands and other consumer-facing industries like personal products could be experiencing a push from their consumer base. Our polling has indicated that the American public cares about companies disclosing on climate,” added Whittaker. He cited other recent polling from Edelman indicating that over 60% of consumers choose, switch, or boycott brands based on their stance on societal issues.