In a world grappling with economic instability and growing scrutiny of ESG practices, a positive trend emerges: the commitment to combating climate change is gaining momentum among the world’s largest companies.
Climate Impact Partners, a leading global carbon finance organization, recently released its sixth annual study analyzing climate commitments of Fortune Global 500 companies. The findings are encouraging: 45% of these companies now plan to achieve net zero emissions by 2050, a significant jump from 39% in the previous year and a remarkable leap from just 8% in 2020.
Sheri Hickok, CEO of Climate Impact Partners, emphasizes the significance of this upward trajectory. “Companies may be continuing their climate action quietly, but we should be celebrating this increase in corporate commitments loudly,” she states. “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 report delves into the specific actions companies are taking and the role of tools like carbon credits in their climate strategies:
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North America Takes the Lead:
Despite the politicization of ESG issues, North America has witnessed the most significant increase in companies with ambitious climate targets. A whopping 79% of North American companies now have a significant commitment to reach net zero by 2050, up from 73% the year before.*
Asia and Europe Follow Suit:
In Asia, 46% of companies are committed to net zero by 2050, a slight increase from 45% last year. In Europe, where over 95% of companies already have a significant climate commitment, there was no notable growth in the number of companies committing to net zero.*
Carbon Credits: A Growing Trend:
The report reveals that companies are increasingly utilizing carbon credits to achieve their climate goals. 42% of companies explicitly state they will use carbon credits to reach carbon neutrality or net zero targets. This is a four-percentage-point increase compared to last year. The use of carbon credits offers companies a competitive edge by allowing them to support verified climate projects, enhance communication with stakeholders, foster internal climate support, and ultimately meet their climate objectives. These credits also direct funding towards impactful climate projects, particularly in regions lacking investment in climate solutions.*
Stronger Targets, More Action:
Companies that incorporate carbon credits into their climate action plans are more likely to set stricter reduction targets. These companies are twice as likely to have near-term Science Based Targets and three times more likely to have a net zero target for their entire value chain. By incorporating carbon credits, companies are incentivized to take immediate action and set ambitious targets for the entire scope of their operations, including their supply chains (Scope 3).This report underscores that despite the challenges, the commitment to addressing climate change is gaining traction among leading businesses. The increasing adoption of carbon credits and the growing number of companies setting ambitious net zero targets are encouraging signals that corporate sustainability is on the rise. As companies recognize the importance of climate action in safeguarding their future success, the global movement towards a more sustainable world continues to gain momentum.
To access the full report and methodology, visit [Link to the report].
