G7 private sector emissions are on a 2.7C trajectory
The corporate sectors of the G7 nations are on course to breach the 1.5C target of the Paris Agreement by more than 1C, according to new research from CDP and global management consultancy Oliver Wyman.
The research, published Tuesday (6 September) warns that no G7 nation has a corporate sector that is on course to decarbonise at a rate fast enough to reach the aims of the Paris Agreement.
On aggregate across the G7, current corporate emissions targets are currently set to reach 2.7C of global warming. The research found that companies in Germany, Italy, and the Netherlands have the best-performing trajectory, placing those nations on course for 2.2C. Following them comes France (2.3C), the UK (2.6C), and the United States (2.8C), while Canadian firms were the worst performing at 3.1C on average.
The analysis is based on CDP temperature ratings, which translate companies’ emissions reduction targets into a global warming outcome using scientific pathways. Crucially, this system accounts for all three scopes and finds that many firms are let down by failing to tackle Scope 3 emissions.
CDP’s global director of capital markets Laurent Babikian said: “The most important driver of rapid emissions reductions in line with the Paris Agreement is ambitious target setting. It is not acceptable for any country, let alone the world’s most advanced economies, to have industries displaying so little collective ambition.
“Armed with this information, governments, regulators, investors, and the public must demand more from high-impact companies without climate targets. Momentum is growing, but as we approach COP27, we must get our 1.5C goal off life support. High-impact companies, and their investors and lenders, must immediately set and honour targets with credible transition plans to allow us to meet this goal.”
There are, however, signs of progress. The European corporate sectors improved from 2.7C in 2020 to 2.4C in 2022, which CDP attributes to the 85% rise in companies that now have science-based targets.
Collectively, companies with science-based targets have reduced emissions by 25% since 2015, compared to an increase of 3.4% in global emissions from energy and industry.
Science-based targets are viewed as a crucial tool to reaching net-zero emissions.
Last year, research found that unless all large businesses in the UK draw up and implement plans decarbonise in line with the Paris Agreement’s 1.5C trajectory within two years, the nation risks missing its long-term net-zero target.
The report came from Sky and WWF, produced in partnership with CDP and Natural Capital Partners. The report is entitled ‘Corporate Ambition Meets Net-Zero Mission’. It found that companies are responsible for two-thirds of the UK’s domestic land-based emissions annually, with large businesses accounting for the largest proportion.
As such, if all large businesses set science-based targets in line with 1.5C by 2023, half of the emissions reductions needed to reach net-zero by 2050 would be delivered by the private sector.
The Science Based Targets initiative (SBTi) unveiled the world’s first standard for corporate net-zero emissions aligned to climate science back in October 2021.
The SBTi has clarified that science-based net-zero targets will require companies to achieve deep decarbonisation of 90-95% before 2050. From that point companies should neutralise unavoidable emissions through offsets and removals. Crucially, the SBTi states that carbon offsetting and removals cannot exceed 5-10% of a company’s emissions, although this is sector dependent.
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.