The report compares the world’s 200 largest public and private companies (representative)
Only 40 of the world’s 100 largest private companies have set net-zero carbon emissions targets to combat climate change, a report released on Monday showed, lagging far behind listed companies.
But the Net Zero Tracker’s report says that for the world to meet the 2015 Paris Agreement to limit global warming to 1.5 degrees Celsius, all companies need to reduce planet-heating emissions.
John Lange of the Net Zero Tracker told AFP that a lack of market and reputational pressure on private companies, combined with a lack of regulation, was why they were slow to embrace climate commitments compared with publicly listed companies.
“I think things are changing on all three fronts,” he added.
The report compares the emissions reduction strategies and net zero targets reported by the world’s 200 largest public and private companies.
The study found that only 40 of 100 private companies assessed had net-zero emissions targets, compared with 70 of 100 public companies.
Of the private companies that have set targets, only eight have published plans for how to achieve them.
“A promise without a plan is not a promise but a naked public relations stunt,” the report said.
Regulations are coming soon
Only two companies – furniture giant Ikea and US engineering giant Bechtel – have ruled out using controversial carbon credits to achieve net zero targets, the report said.
Carbon credits allow companies to offset emissions by spending money on projects that reduce or avoid emissions, such as protecting forests, but critics say they allow companies to continue polluting.
Meanwhile, none of the eight fossil fuel companies included in the report have a net-zero emissions target, compared with 76% of the industry’s largest public companies.
Lang said the numbers showed little improvement compared to the analysis before 2022, “despite a significant increase in global regulation.”
Several jurisdictions, including the UK, have adopted climate disclosure regulations.
Other countries are also about to introduce relevant regulations, with business centers in California and Singapore requiring greenhouse gas emissions reporting from 2027.
The EU has also launched two climate regulations – the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) – which will soon require thousands of large companies to report on their climate impacts and emissions, and Take action to limit them.
“We’re trying to educate private industry about what they’re going to face,” Long said.
“Trickle-down effect”
EU policies will have a particularly far-reaching impact, not only on businesses headquartered in the EU, but also on those headquartered elsewhere with branches or subsidiaries in member states.
However, two European private companies, including French supermarket chain E. Leclerc, were named in the report for setting emissions reduction targets.
E. Leclerc told AFP the company had worked to adopt more sustainable practices, such as eliminating the use of single-use plastic bags, and was “committed to setting near-term company-wide emissions reduction targets”.
But with the implementation of EU regulations looming, companies will not be able to “dodge” climate targets for much longer, Siebrig Smit of the New Climate Institute told AFP.
“This is virtually watertight. If companies want to do business in Europe, they will have to face the consequences,” she said.
Lang said the companies analyzed accounted for about 23% of the global economy, with the majority based in China, the United States or European Union countries – the largest emitters of greenhouse gases.
Any changes companies make to meet new regulations will have huge benefits for the environment.
“They have such a trickle-down effect. Whenever a large company like this implements something real, it has a huge impact on other industries they operate in,” Smit said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
