Global companies with a combined value of $38 tn had emissions reduction targets or commitments approved by the end of 2021 but the world is still not on track to halve emissions by 2030, according to new research from the Science Based Targets initiative (SBTi).
The non-profit body, which aims to enable businesses to set emissions reduction targets in line with science, finds that roughly 80 percent of the targets approved in 2021 were aligned with limiting global temperatures increases to 1.5°C, the target set by scientists for the world to avoid the worst impacts of climate change.
A significant 78 percent of SBTi companies with approved science-based goals have targets covering Scope 3 emissions – the indirect emissions that occur in the value chain of the reporting company.
The SBTi report goes further to say that nearly two thirds (63 percent) of companies with 1.5°C-classified targets claim they intend to cut emissions at a higher rate than is required. Between 2015 and 2020, most companies with 1.5°C targets cut emissions twice as fast as required, it states.
A ‘critical mass’ (27 percent) of high-impact companies have now joined the SBTi globally. Science-based targets are linked with 12 percent emissions reduction across Scope 1 and Scope 2 emissions in 2020 and longer-term reduction of 29 percent since 2015, according to the report.
CLIMATE ACTION STOCK-TAKE
The first assessment of the SBTi’s progress since the COP26 climate summit in Glasgow reveals an increasing international appetite and interest in science-based targets but also acknowledges the need for more action. At the end of last year, 2,253 companies across 70 countries and 15 industries, representing a combined $38 tn in market capitalization, or more than a third of the global market cap, had approved 1,082 emissions reduction targets or commitments.
The 2021 increases in target adoption and commitments came from companies in G20 countries that are significantly contributing to global emissions, such as China and India, as well as Brazil, South Korea and South Africa. G7 countries are home to 55 percent of all SBTi-approved companies overall.
According to the UN Environment Programme, the global economy must cut emissions by a challenging 7.6 percent every year between 2020 and 2030 to achieve the 1.5°C target.
Dr Luiz Fernando do Amaral, CEO of the SBTi, says in a statement that the initiative will continue to work with governments, companies and NGOs ‘through strong collaboration, healthy debate and scientific research to reinforce 1.5°C corporate climate action as the new normal.
‘The science is clear: we are already experiencing the impacts of climate change and continuing on the current trajectory equals catastrophe. This report shows that the value the SBTi brings to society is more needed now than ever before – we must continue to drive the exponential growth of science-based targets and make them ‘business as usual’ for companies and financial institutions worldwide.’
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