21st September 2021

Reality Check

The third annual study to assess how Fortune Global 500 companies have increased their climate actions and commitments.

Read on for a snapshot of the findings and trends, or download the full report.

Our research finds that increasingly the world’s largest companies are leaning in to the collective requirement to tackle climate change, with 38% having a significant milestone set for 2030, up eight percentage points from last year.

There has been a three-fold increase in net zero targets (albeit from a low base and mostly with distant achievement dates), 50% increase in the number of companies that have either achieved carbon neutrality or are targeting it by 2030, and a 25% increase in Science-Based Targets

By breaking out net zero and carbon neutral commitments, we can see that many companies are using the two approaches in tandem. The vast majority (86%) of companies with a net zero target have set them after 2030. One third of those companies with a net zero target are either carbon neutral already or have a more immediate carbon neutrality target.

Looking at net zero targets, we consider 20% not to be fully aligned with the emerging consensus around how net zero is defined and would consider these as closer to carbon neutrality targets on the basis of not covering value chain emissions. We consider 56% of net zero targets as responsible net zero targets, with a target date in line with the government target for net zero where they are headquartered, or the Paris Agreement if there is no national target. We consider 24% of net zero targets as leadership net zero targets, accelerating ahead of the national target for net zero where they are headquartered, or the Paris Agreement if there is no national target. This is an important distinction to make: net zero targets can’t be considered as corporate climate leadership if they are the law of the land.

While there has been an encouraging growth in actions and commitments, we must be mindful not to exaggerate the progress: Over 60% of companies are not committed to deliver a meaningful climate milestone by 2030.

But our research shows that there is a significant and growing group of the world’s largest companies for which progress and profit can live together and who believe you can be in the business of bettering the world.

Corporate climate action and 2030 commitments are up a quarter in a year

38% of companies in the Fortune Global 500 have delivered a significant climate milestone or are publicly committed to do so by 2030, up by eight percentage points from last year. This has mostly been driven by a 50% increase in the number of companies that have either achieved carbon neutrality or are targeting it by 2030, and by a 25% increase in Science-Based Targets (SBTs).

Figure 1: Date of Fortune Global 500 companies’ public commitment that they are, or will be by 2030: carbon neutral, meeting an RE100, SBT or net zero target.

Carbon neutrality, SBTs and net zero are often being used in combination by companies, but over different time horizons

Carbon neutrality (59%) leads the milestones achieved to date, SBTs (59%) lead the milestones set to be achieved before the end of this decade, and net zero (55%) lead the milestones beyond 2030.

Figure 2: Milestones achieved to date, milestones set to be achieved by 2030 and milestones beyond 2030: carbon neutral, RE100, SBT or net zero targets

Net zero has arrived as a major pillar of corporate climate action, but confusion over definitions means it is not quite that simple

The number of companies with a net zero target has trebled in a year: up to 25% of companies from 6% of companies a year ago.

86% of these net zero targets are set for further out than 2030. 52% of these companies with a net zero target have set a Science-Based Target, and one third of companies with a net zero target have a more immediate carbon neutral target/achievement.

We consider 20% of net zero targets to be not fully aligned with the emerging consensus around how net zero is defined, and would consider these as closer to carbon neutrality targets on the basis of not covering value chain emissions. We consider 56% of net zero targets as responsible net zero targets, with a target date in line with the government target for net zero where they are headquartered, or the Paris Agreement if there is no national target. We consider 24% of net zero targets as leadership net zero targets, accelerating ahead of the national target for net zero where they are headquartered, or the Paris Agreement if there is no national target.

Figure 3: net zero targets broken down into what we consider carbon neutrality targets, responsible net zero targets, and leadership net zero targets.

We asked some of our Fortune Global 500 clients for their reaction to the research

“In a year in which we have witnessed the reality of a changing climate through forest fires, flooding, and extreme weather, we have also observed a dramatic uptick in corporate climate action. The world needs all companies to commit and follow through on their pledges to have a chance of avoiding the most catastrophic effects of climate change. Through this research, Natural Capital Partners offers insights to inspire even more companies to navigate, create and commit to meaningful targets for a zero future.”

Elizabeth Willmott, Carbon Program Director, Microsoft
“To mitigate the effects of the growing climate crisis and meet the world’s Net Zero targets, we must unite with a common commitment to take aggressive, science-based action in line with 1.5° Celsius. The acceleration of corporate climate ambitions highlighted in the report sends a powerful and positive signal of leadership to investors, customers and suppliers, and it is essential that this leadership cascades across the entire value chain.”

David Eichberg, Head of Climate Strategy, HP Inc
“It is a positive sign that corporates are accelerating action to keep us within the critical 1.5°C threshold. As more companies commit to science-based targets and net-zero pathways we will need to see commitments and action accelerate at all levels of society in line with UN and Intergovernmental Panel on Climate Change (IPCC) findings.”

Anthony Ma, Global Renewable Energy Category Lead, Accenture
“When it comes to climate change, the time for awareness has long passed and the time for action is long overdue. As the report shows, the corporate world is increasingly taking this action. ING recently sharpened our climate goals and want to carry that momentum forward, supporting our customers in making their transition and building on the partnerships we have with peers and across industries. We need to be united to be effective.”

Anne-Sophie Castelnau, Global Head of Sustainability, ING
“Even though COP was delayed and there is concern about its success in Glasgow, companies are increasingly challenging themselves to step up the ambition on urgent climate action. This is a race we all have to win or the whole of society and the planet loses.”

Zelda Bentham, Group Head of Sustainability, Aviva

To read more findings, understand our methodology or access the full data set, please download the full report.

Download the report