Report: Net-zero targets hitting critical mass, but ‘credibility gaps’ must be addressed

The analysis finds that around 60% of firms that are reporting emissions have not set net-zero across Scope 3 emissions

The analysis uses the Net Zero Tracker database of over 4,000 entities, consisting of cities, corporates, regions and nations. It finds that across these 4,000 entities, 1,178 now have net-zero targets in place, with “most countries” now have a net-zero target.

The report finds that 91% of global GDP is now captured by national government net-zero targets, up from 68% in December 2020. As such, 80% of the global population is now covered by net-zero targets, up from 52% compared to December 2020.

This is also being reflected in the corporate sphere, with more than one-third (702) of the world’s largest publicly traded companies having net-zero targets. This is an increase of almost 300 companies compared to two years ago.

However, despite the mainstreaming of net-zero targets, the analysis finds there are major credibility gaps that need to be addressed by corporates and government actors alike.

Frederic Hans, climate policy analyst at NewClimate Institute and the report co-lead said:  “The growth of net-zero targets has provided a governance framework of unprecedented scale and scope – carving out an achievable path to global decarbonisation.

“But our analysis clearly shows major flaws in current net-zero target-setting practice across all entities.”

On the corporate front, just 35% of companies with net-zero targets “meet the minimum procedural starting line criteria”, as defined by the UN’s Race to Zero initiative. Companies are failing to publish net-zero plans and deliver immediate emissions reductions, the report notes.

Additionally, around half of the Forbes Global 2,000 does not have a target of any kind. Of the 702 companies that have net-zero targets, only around 50% have embedded the reporting against these targets into annual reports and documents.

The report adds that many firms have only announced targets or their intention to set such targets in the future.

The analysis finds that around 60% of firms that are reporting emissions have not set net-zero across Scope 3 emissions.

Of the companies examined on the Forbes Global 2,000, the analysis found that it was the carbon-intensive sectors that were pushing the most to set net-zero targets. Fossil fuel firms had the second highest percentage of net zero targets (49%) among those industries with more than ten companies in the Forbes 2000 list. Materials firms such as steel and cement, and transport companies were the other two industries with high percentages.

The Stocktake analysis also found that there has been a steady rise in the share of emissions covered by national net-zero targets. These targets, defined as those enshrined in domestic legislation or policy documents, had increased from 10% of national GHG coverage in 2020 to 60% today.

The report updates and expands the data and analysis presented in the ECIU and Oxford’s ‘Taking Stock’ report. That report first analysed global net-zero commitments across countries and companies.

Commenting on the study, Richard Black, senior associate, Energy & Climate Change Intelligence Unit (ECIU), said: “Ambitious interim targets are vital to delivering net-zero and limiting cumulative emissions. But even leaving aside the climate emergency, the severe disruption to global fossil fuel supplies due to the Russian invasion demands that countries rapidly cut their dependency.

“Clear interim targets can be the solution to both the climate and energy crises; by providing the guardrails to accelerate the shift away from fossil fuels.”