European businesses off course to meeting net-zero pledges
Almost one-third of Europe's largest companies have pledged to reach net-zero emissions by 2050 at the latest, but only 5% are on course to reach these ambitions, a new study has found.
The “Reaching Net-Zero by 2050,” report from Accenture analysed climate pledges from more than 1,000 listed companies across Europe’s major stock indexes. The analysis has found that 30% of these companies have now pledged to reach net-zero by 2050 at the latest.
However, the report also finds that just 5% of analysed firms are on course to reach their net-zero ambitions across scope 1 and 2 emissions, let alone value chain emissions.
Accenture notes that the pace of decarbonisation from these corporates has delivered a 10% emissions reduction on average over the last decade. Interestingly, businesses that do not have net-zero targets saw their emissions increase.
If businesses continue at the current trajectory, the report believes that only 9% will meet net-zero targets. Fortunately, even companies that have achieved carbon reductions of 0.5% annually can still reach net-zero by mid-Century if they double the pace of emissions reduction by 2030 and triple it by 2040.
“The European business community is more engaged than ever in the race to zero, with the number of companies publicly setting goals having grown over the last two years,” Accenture’s European chief executive Jean-Marc Ollagnier said.
“And as our study shows, the targets work. Net-zero should be managed as any strategic business priority: set clear objectives to drive the entire organization to the same direction, and monitor progress to correct the trajectory as appropriate. Making targets public also helps create the required collective momentum, as companies can’t solve it alone.”
The research finds that industries such as professional services and information and communications look set to be able to reach net-zero across their operations by 2050 if they double the pace of decarbonization and then accelerate another 50% to 70% in the following 10 years.
The average net-zero target year for European companies included in the study is 2043. Many companies in carbon-intensive industries — such as oil and gas and chemicals — have set net-zero target dates of or close to 2050, while many in services sectors aim for around 2035.
The UK leads Europe in terms of companies setting net-zero targets. In total, 37% of analysed UK companies had net-zero targets, compared to 27% in Germany and 18% in France.
The report comes just days after the UK COP26 Unit's deputy director for engagement, Nick Baker, told edie that businesses needed to step up their own commitments and "turbocharge collaboration" on climate ahead of the conference, to help keep a 1.5C future within reach.
Delivering the keynote speech at edie’s COP26 Climate Action Workshops, hosted in London on 5 October for members of edie’s exclusive networking clubs, Baker recapped on a busy 18 months engaging non-state actors ahead of the crucial conference.