40% of Major Entities Still Lack Greenhouse Gas Reduction Targets: An Urgent Call to Action
By David Stanway
SINGAPORE (Multibagger) - Despite a growing awareness of the catastrophic consequences of climate change, over 40% of major companies, cities, and regions have yet to set any targets to reduce greenhouse gas emissions. This alarming statistic was revealed in an annual "stocktake" released on Monday, which aims to measure global progress in combating climate change.
The Commitment Gap: A Persistent Issue
While there has been an increase in net-zero pledges from governments and enterprises compared to last year, many have been sidetracked by wars, elections, and economic challenges. This has resulted in a significant "commitment gap," according to Net Zero Tracker, a coalition of research groups at the University of Oxford.
As countries prepare to submit new 2035 climate targets to the United Nations, policymakers and company boardrooms are struggling to translate long-term goals into concrete actions. The researchers point out that transition plans are still lacking robustness and detail.
"A common theme throughout this report is the persistent lack of integrity across the board," said John Lang, head of Net Zero Tracker's Energy and Climate Intelligence Unit.
Key Findings of the Report
The report scrutinized net-zero commitments and action plans from 198 countries, 706 sub-national regions, 1,186 cities, and nearly 2,000 publicly-listed companies. Here's what they found:
- Formal Net-Zero Pledges: Out of more than 4,000 entities, 1,750 have made formal net-zero pledges, leaving nearly 1,700 without any targets.
- Corporate Commitments: Just under 60% of listed firms have set net-zero targets, a 23% increase from last year. Asia has seen a significant rise in pledges.
- Companies Without Targets: The total number of companies with no emissions targets fell to 495 from 734 last year. Notable firms without targets include Tesla, BYD, Nintendo, and Berkshire Hathaway.
- Examples of Good Practice: Costa Rica, Volvo, and Google owner Alphabet were cited as examples of good practice in implementing net-zero pledges.
The Robustness Problem
Only 5% of regions, cities, and companies met all of Net Zero Tracker's criteria for robustness, which includes having detailed plans to phase out fossil fuels. Around half have failed to set targets for non-CO2 greenhouse gases like methane. Many firms also failed to account for emissions across their entire value chains or clarify how much they will rely on offsets to meet targets.
Global Commitments
As many as 148 states, covering 88% of the world's total population, have net-zero commitments. However, countries like Mexico, Iran, and Azerbaijan (host of the COP29 climate talks in November) are among the exceptions.
Technologies and Future Steps
Technologies exist to triple the current levels of climate ambition. The next round of nationally determined contributions (NDCs) submitted to the U.N. must provide more details about how targets will be implemented, the report concluded.
"There's been some good progress, but we need a lot more," said Catherine McKenna, a former Canadian environment minister who chairs a U.N. expert group on net-zero commitments.
Analysis: What This Means for You
Understanding the findings of this report is crucial, even for those who might not be well-versed in financial markets or climate science:
- Impact on Investments: Companies that fail to set or meet greenhouse gas reduction targets may face regulatory penalties, investor backlash, and reduced market competitiveness. This could affect their stock prices and your investment portfolio.
- Economic Implications: Regions and cities that do not adopt robust climate action plans may face higher costs in the long run due to climate-related damages and economic disruptions.
- Personal Responsibility: While governments and corporations play significant roles, individual actions also matter. Choosing to support companies with strong climate commitments can drive broader change.
In summary, the lack of comprehensive climate action plans among a significant portion of major entities poses a risk not just to the environment but also to economic stability and investment portfolios. As we move forward, more detailed and robust plans are essential to achieve global net-zero targets and mitigate the catastrophic impacts of climate change.