Climate Impact Partners, a leading carbon finance organization with more than 20 years of experience in the voluntary carbon market, released the fourth annual study assessing the climate commitments and goals of Fortune Global 500 companies. The latest report reveals while 42% of the Fortune Global 500 have delivered, or are committed to deliver, a significant climate milestone by 2030, there is still 37% that have yet to make any significant climate commitment.
The report shows that climate commitments among this group continue to grow, but greater ambition and scope of the targets is needed. Nearly 40% of companies have a net zero target, but nearly one third exclude Scope 3, or value chain, emissions. Emissions generated through the corporate value chain makes up an estimated 80% of the Fortune Global 500’s footprint. Meanwhile, the Fortune Global 500 saw the highest annual growth rate in aggregate sales in history, reaching $37.8 trillion.
“We’re encouraged to see more and more companies from this prestigious group put a stake in the ground and make climate commitments,” said Vaughan Lindsay, CEO of Climate Impact Partners. “There are some signals, however, that ambition and urgency might be waning. Much of the growth in commitments this year has been driven by targets set well beyond 2030, which we know is a critical decade for the planet. There are tools, such as the use of carbon finance and offsetting, every company can adopt now that can make an impact. We cannot wait to show progress, we must start investing in meaningful solutions today.”
The report also revealed how different pathways may be helping companies make progress. For instance, companies using high-quality carbon credits to take responsibility for residual emissions today and be carbon neutral, are twice as likely to have a Science-Based Target (SBT) than those companies that do not. Many companies are also combining carbon neutrality and net zero to demonstrate action today while working towards a more ambitious future goal.
Ambition and commitments also start to look different when examining specific sectors. Those with the highest number of targets overall seem to be concentrated in more consumer facing industries, where there is high pressure from customers to decarbonize. More than 80% of companies in the technology sector now have some significant 2030 climate commitment, as do 60% of companies in telecommunications and media, 63% of companies in retail, and more than 60% in the healthcare and pharmaceuticals sector.