Key Impact Points:
- 45% of companies plan to be net zero by 2050, up from 39% last year and dramatically up from 8% in 2020.
- 42% of companies explicitly state they will use carbon credits to meet carbon neutral or net zero targets.
- Companies using carbon credits are more likely to have rigorous reduction targets, including Science Based Targets.
Despite external crises and ESG backlash, net zero commitments among the world’s largest companies have increased significantly. Climate Impact Partners’ sixth annual study reveals that 45% of Fortune Global 500 companies plan to be net zero by 2050, up from 39% last year and a substantial rise from just 8% in 2020.
Sheri Hickok, CEO of Climate Impact Partners, stated, “Companies may be continuing their climate action quietly, but we should be celebrating this increase in corporate commitments loudly. The top earning companies know that despite economic headwinds and ESG backlash, tackling the climate crisis is critical to future-proofing their businesses.”
Regional Increases in Climate Commitments
- North America: 79% of companies have a significant commitment by 2050, up from 73% last year, despite ESG politicization.
- Asia: 46% of companies have a significant commitment by 2050, slightly up from 45% last year.
- Europe: Over 95% of companies already have a significant commitment, with no growth in the number of companies with one.
Growing Use of Carbon Credits
More companies are planning to use carbon credits to reach their climate targets:
- 42% of companies explicitly state they will use carbon credits to meet carbon neutral or net zero targets, up from 40% last year.
- By supporting verified carbon projects, businesses can enhance stakeholder communication, foster internal climate support, and meet their climate objectives.
- Credits enable companies to direct funds to impactful climate projects, often in regions lacking investment in climate solutions.
Carbon Credits Linked to Rigorous Reduction Targets
Companies incorporating carbon credits into their climate action plans are:
- Twice as likely to have near-term Science Based Targets.
- Three times more likely to have a net zero target for their entire value chain.
By putting a price on carbon through carbon credits, companies pursuing carbon neutrality now are almost 1.7 times more likely to have near-term Science Based Targets across their entire value chain (including Scope 3 emissions) than companies not planning to be carbon neutral by 2030.
About the Report
Climate Impact Partners’ sixth annual report uncovers key insights and emerging trends in the climate commitments of the world’s largest companies. The report also features opinions from the newly formed Customer Advisory Boards, comprising 18 sustainability professionals from companies with combined annual revenues of $400 billion.
