Over 239 Companies are Projected to Miss Net Zero Targets: Emphasis on the Difficulty of navigating Scope 3 Emissions
Overview:
The Science Based Targets initiative (SBTi) has removed the net-zero commitment status for 239 companies, including major players like Microsoft, Procter & Gamble, Unilever, and Walmart, due to challenges in meeting ambitious emission reduction targets. These companies collectively represent over $4 trillion in market capitalization and struggle particularly with reducing Scope 3 emissions. SBTi is reviewing its Corporate Net-Zero Standard to provide clearer guidelines by 2025. Despite the setback, companies are reaffirming their sustainability commitments and engaging with SBTi to validate their targets, emphasizing ongoing efforts to align with the Paris Agreement goals.
Summary:
The Science Based Targets initiative (SBTi) recently made changes to its dashboard, marking 239 companies with a "commitment removed" status for their net-zero goals. This development underscores the challenges that corporations encounter in formulating strategies to achieve such ambitious targets. Notable companies affected include Microsoft, Procter & Gamble, Unilever, and Walmart, collectively representing over $4 trillion in market capitalization. Despite this change in status, these corporations maintain their commitment to aggressive emissions-reduction goals, although they have struggled to meet SBTi's validation requirements within the specified timeframe.
A significant hurdle for companies is the reduction of Scope 3 emissions, which encompass indirect emissions from customers and the supply chain. SBTi's survey findings reveal that approximately half of the companies perceive Scope 3 emissions as a major challenge in setting net-zero targets. In response, SBTi is conducting a review of its Corporate Net-Zero Standard, considering revisions related to Scope 3 target setting and measurement. These potential changes are anticipated to be implemented by 2025, aiming to provide clearer guidelines for companies to address Scope 3 emissions effectively.
