Despite facing global economic uncertainties and pushback against ESG initiatives, the world’s largest corporations are demonstrating an unwavering commitment to climate action. A new study by Climate Impact Partners, a leading force in global carbon finance, reveals a significant six percentage point increase in net zero commitments among Fortune Global 500 companies this year.
The sixth annual report, released today, highlights that 45% of these influential companies are now committed to achieving net zero emissions by 2050. This marks a substantial rise from 39% in the previous year and a dramatic surge from just 8% in 2020. This upward trend underscores the growing recognition among corporate leaders that addressing climate change is not merely an ethical imperative but a crucial strategy for long-term business resilience.
Sheri Hickok, CEO of Climate Impact Partners, emphasizes the significance of these findings: “While companies may be proceeding with their climate strategies with less public fanfare, this increased commitment from the corporate sector is a cause for significant optimism. Top-earning companies understand that navigating the climate crisis is essential for securing their future success, regardless of economic fluctuations or ESG debates. The time for decisive action is now, requiring both ambitious target setting and the strategic deployment of essential tools like carbon credits to accelerate progress. The Fortune Global 500 have a vital role to play in amplifying climate action and generating tangible impact today.”
The comprehensive report delves into the specifics of these climate commitments, examining the types of targets being set and the planned utilization of carbon credits as a key mechanism for achieving ambitious goals.
North American Companies Lead the Charge in Climate Commitments
Interestingly, North America has emerged as a region demonstrating remarkable growth in corporate climate ambition, even amidst the politicization of ESG. Currently, 79% of North American companies have established significant climate commitments aimed at 2050, a notable increase from 73% last year. Asia also shows positive momentum, with 46% of companies now committed to substantial 2050 targets, up from 45% in the prior year. Europe, already a leader in corporate climate action with over 95% of companies having significant commitments, has maintained its high level of ambition.
Carbon Credits Increasingly Recognized as Essential for Net Zero Goals
A growing number of companies are strategically incorporating carbon credits into their climate action plans. The study reveals that 42% of companies explicitly state their intention to utilize carbon credits to achieve carbon neutrality or net zero targets. This is an increase from 40% last year, indicating a growing acceptance and understanding of the vital role carbon credits play in effective climate strategies.
Investing in verified carbon projects and utilizing carbon credits to compensate for unavoidable emissions offers businesses a distinct competitive advantage. These actions enhance stakeholder engagement, cultivate internal support for climate initiatives, and facilitate the achievement of climate objectives. Furthermore, carbon credits direct crucial funding to impactful climate projects, frequently located in regions that are under-resourced in terms of climate solution investments.
Strong Correlation Between Carbon Credit Usage and Rigorous Climate Targets
The report’s findings highlight a significant correlation between the use of carbon credits and the ambition of corporate climate targets. Companies that integrate carbon credits into their climate strategy are twice as likely to set near-term Science Based Targets (SBTs) and three times more likely to establish net zero targets that encompass their entire value chain.
By integrating a price on carbon into their operations through the strategic use of carbon credits, companies pursuing carbon neutrality and taking proactive climate action are almost twice (1.7 times) as likely to adopt near-term Science Based Targets across their complete value chain, including Scope 3 emissions, compared to companies that are not carbon neutral or do not have plans to achieve carbon neutrality by 2030.
For a detailed examination of the report’s methodology and full findings, please visit this link.
About Climate Impact Partners
Climate Impact Partners stands as a recognized leader in the development and delivery of high-quality, impactful carbon market solutions for corporate climate action. With over 25 years of experience, the organization is committed to achieving a cumulative reduction of 1 billion tonnes of CO2 emissions. Climate Impact Partners collaborates with leading businesses globally, supporting over 600 carbon removal and reduction projects across 56 countries. Dedicated to driving transformative change in the global economy, improving livelihoods, and restoring a thriving planet, Climate Impact Partners develops and manages best-in-class carbon-financed projects. The company creates and manages carbon credit and energy attribute certificate portfolios, enabling clients to effectively offset unavoidable emissions, internalize carbon pricing to incentivize sustainable practices, and achieve ambitious climate goals. Climate Impact Partners builds upon the combined expertise and legacy of two pioneering entities in the voluntary carbon market – Natural Capital Partners and ClimateCare, ensuring integrity and innovation in all its solutions. To learn more, visit www.climateimpact.com.
Media Contact:
Mehak Chadha
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