While more than 34% of the world’s largest companies are now committed to net zero goals, 93% will fail to meet their targets, if they don’t at least double the rate of emissions reduction by 2030, according to a new report from Accenture.
Based on an analysis of commitments to emissions reduction and data from the 2,000 largest public and private companies around the world, Accenture’s report finds that growing energy price inflation and supply insecurity is pushing commitments out of reach, even with clear and publicly visible decarbonization goals in place and a record rise in the number of corporate targets validated by the Science-Based Targets initiative (SBTi) this year alone. Moreover, 84% of companies plan to increase investments in their sustainability initiatives before the end of 2022.
To accelerate pace to net zero, organizations will need ‘carbon intelligence’ capabilities, embedding carbon and broader ESG intelligence into their core businesses and across their value chains to control, improve and drive value-creation. This includes integrating carbon, energy and other sustainability data and insights into financial and operational business information to help drive everyday decision-making.
“Amid global economic, political and environmental disruption, more companies than ever before have publicly committed to largely decarbonizing by around 2050. This heightened ambition is encouraging, but it is also clear that a steep acceleration of emission reductions is required,” said Jean-Marc Ollagnier, CEO of Accenture for Europe. “Maximizing value from mature technologies, such as digital and certain renewable energies, while accelerating the deployment of breakthrough solutions like hydrogen will be critical. Most importantly, reaching net zero will require urgent and profound transformations, as it is about embedding sustainability into everything organizations do, redefining their purpose, culture and business models.”
Despite the net zero commitments, only 7% of companies are on track to achieve their targets for scope 1 and 2 emissions at the observed rates of change. Moving targets to 2050 increases that share just slightly to a mere 8%. Even in a scenario where companies accelerate emissions reduction by two times the current rates in the years to 2030 and then three times after – 59% would still fail by 2050; the deadline deemed necessary to avert the most catastrophic and irreversible impacts of climate change.
“Now is perhaps a tougher time to be a CEO than any stage in the recent past, in particular, attempting to square the circle between sustainability commitments, inflationary and recessionary pressures and the need to deliver both shareholder and stakeholder value,” said Peter Lacy, Accenture’s global Sustainability Services lead and chief responsibility officer.