Finance giants press high-carbon businesses to set science-based climate targets

Image: Dow Chemical. Pictured: The company's manufacturing site in Stade, Germany

The call to action, coordinated by CDP and made today (1 November), has the support of more than 367 financial giants and multinational corporates with a collective valuation of more than $33trn.

Included in this cohort are the likes of Legal & General Investment Management, Credit Agricole, Bayer, BMW and L’Oreal.

These businesses are calling on more than 2,100 other firms, with a focus on those in high-emission sectors, to pledge to reduce their greenhouse gas emissions in line with the Science-Based Targets initiative’s (SBTi) 1.5C trajectory. SBTi targets are typically set for the 2030s and must cover some Scope 3 (indirect) emissions as well as operational emissions.

Companies asked to develop science-based targets include FedEx, Rio Tinto, Nippon Steel and ­Dow Chemical, as well as China’s biggest online retailer JD.com.

CDP estimates that the 2,100+ firms asked to act are collectively producing more than 8.3 gigatonnes of Scope 1 (direct) and Scope 2 (power-related) emissions each year. This is equivalent to the combined annual emissions of the US, the UK and Japan.

CDP has coordinated a campaign pushing high-emission firms to set SBTi-approved targets since 2020. The number of financial institutions supporting this campaign has more than doubled since its launch.

Last year, the campaign succeeded in persuading 99 businesses to develop science-based targets, bringing the cumulative total to 470 businesses.

“Record breaking temperatures and devastating floods around the world this year serve as a stark reminder of the urgent need for businesses to drastically reduce emissions,” said CDP’s global director of requesting authorities Claire Elsdon.

“The success of this campaign in previous years and the increased number of financial institutions and corporate buyers joining our call for action this year, shows the pivotal role those organizations can play in pushing portfolio companies and suppliers to decarbonise, not least to meet their own Scope 3 targets.”

Corporate Climate Stocktake

The news from CDP comes shortly after the We Mean Business Coalition published its Corporate Climate Stocktake, tracking the views and plans of large businesses and high-emissions sectors regarding the low-carbon transition.

250 business leaders in power, road transport, concrete and cement, steel, shipping, agriculture, aviation and hydrogen were polled. Three in ten said they do not expect their organisation to end fossil fuel use entirely before 2050, despite the majority of them having set net-zero targets for 2050 or sooner.