Net-zero ambition 500: companies across the globe committed to leading the science-based net-zero transformation
17th Nov 2023
In October 2021, the SBTi launched the world’s first Corporate Net-Zero Standard for setting science-based targets to achieve net-zero emissions no later than 2050. This gave companies the first ever science-based framework for aligning long-term decarbonization of their value chains with the Paris Agreement goal of limiting global temperature rise to 1.5°C.
Two years later, the SBTi has validated the net-zero targets of more than 500 companies - a number which looks set to grow quickly. As of November 2023, over 2,000 more organizations are committed to setting net-zero targets within the next 24 months.
The need for robust and credible net-zero targets and transition plans grows ever more acute. Impacts of the climate crisis are becoming increasingly apparent - most recently evidenced by the intensity with which Hurricane Otis devastated Acapulco, Mexico and Storm Ciarán battered western Europe - and global temperatures continue to rise, with 2023 set to be the hottest year on record. The window of opportunity to prevent the worsening effects of climate breakdown is narrowing rapidly.
However, companies from across sectors and regions have set science-based net-zero targets - demonstrating to their peers the ambition and extent of decarbonization that is needed and possible in the face of this threat. These include companies from high-emitting sectors with the biggest potential impact on emissions reduction.
Additionally, multinational power company Iberdrola (Spain) has set targets to reach net-zero by 2039. The decarbonization of the power sector is required for a net-zero economy, as other sectors transition to clean energy to slash their scope 2 emissions. The power sector’s ability to establish steep emissions reductions, enabled by rapid cost reductions for solar, wind, and energy storage, makes the decarbonization of power essential to halving global emissions by 2030 and achieving net-zero before 2050.
Some of the world’s most economically and environmentally impactful companies have also set net-zero targets. Companies included in CDP's high-impact sample, which lists the most significant ones from a market capitalization and GHG emissions perspective, have set net-zero targets, such as Colgate (USA) and AstraZeneca (UK).
Additionally, TDC Net (Denmark) and Moody’s (USA) demonstrate how ambitious companies can be. TDC has a net-zero target for 2030 and Moody’s for a decade later, both aiming to achieve net-zero far sooner than the global goal of 2050.
Net-Zero targets cover the globe
Corporate net-zero pledges have proliferated in recent years, with 92% of global GDP now covered by some form of net-zero target. Since June 2022, the number of net-zero targets has risen more than 40%, and this figure now includes half of the world’s 2,000 largest companies, according to recent analysis by Net Zero Tracker.
However, the credibility of some of these targets has been questioned, with the Net Zero Tracker Analysis finding that ‘integrity of company mitigation targets should urgently improve if they are able to be achieved in line with the Paris Agreement’s temperature targets. Targets are an essential step in a company’s decarbonization plan, and the SBTi’s Corporate Net-Zero Standard is recognized as one of the most robust, science-based net-zero framework that enables companies to align their near- and long-term climate ambition with a net-zero world by 2050. It now covers the globe, with companies from every continent having set net-zero targets.
Europe has the highest number of companies with both net-zero targets set using the Corporate Net-Zero Standard, and commitments to do so, with more than 355 companies with targets and 1,200 with commitments.
Europe is followed by North America and Asia. 80 North American companies have validated net-zero targets, and 323 more have net-zero commitments. 55 Asian companies have validated net-zero targets, and 494 companies are committed.
The regions which currently have the lowest uptake of the Corporate Net-Zero Standard are Latin America, with four companies with targets and 67 with commitments, Oceania with three companies with targets and 65 with commitments; Africa with seven targets and 19 commitments; and the Middle East and North Africa region, with one company with targets and 13 with commitments.
Currently, more than 120 financial institutions worldwide are committed to setting net-zero targets. However, as there is no science-based framework for net-zero for this sector, financial institutions are not yet able to develop net-zero targets. To address this need, the SBTi is developing a Net-Zero Standard for Financial Institutions. This will bring much-needed clarity and direction for the financial sector. The SBTi held a public consultation in Q3 2023 via webinars, workshops and further road testing, and further developments will be released in 2024.
Wider net-zero alignment
In March 2022, the United Nations established a High-Level Expert Group (HLEG) on the Net-Zero Emissions Commitments of Non-State Entities. This aimed to develop stronger standards for net-zero emissions pledges by non-state entities, such as businesses, investors, cities, and regions.
The HLEG report, published at COP27, contains 10 high-level recommendations for non-state entities. The SBTi is mentioned as an example of robust methodology consistent with limiting warming to 1.5°C, and is currently progressing alignment with the relevant HLEG recommendations.
The road ahead
To support the continued growth of science-based targets, including net-zero targets, and meet future demand, the SBTi is scaling up its target validation services as part of its transformation program. This builds on progress which has seen us halve waiting times for validation since the Net-Zero Standard’s launch. The SBTi is also adopting recognized best practice in strengthening its standard-setting with the appointment of a Technical Council and further standardization of its procedures, to ensure technical integrity.
The upcoming Financial Institutions’ Net-Zero Standard will provide much-needed clarity for the finance sector, and help to maximize their ability to drive a net-zero economy.
Additional SBTi resources include:
Supplier Engagement Guidance, supporting the development of net-zero targets covering companies’ supply chains
Upcoming Beyond Value Chain Mitigation (BVCM) Guidance, supporting companies go beyond their science-based targets by channelling additional climate finance towards mitigation activities outside of their value chains
Upcoming work on scope 3 target-setting guidance
Take action now
The first 500 companies to set net-zero targets aligned with science show what is possible in terms of ambitious decarbonization. Their sector peers must follow the lead of these pioneers and develop net-zero targets now. The world cannot wait.
Play your part in protecting the planet. Set net-zero science based targets.