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New research from climate solutions specialists Natural Capital Partners has found that 23% of the Fortune Global 500 have delivered climate targets already or publicly committed to deliver by 2030. 2030 is the deadline set by the International Panel on Climate Change (IPCC) to get on the path that limits average temperature rise to 1.5 degrees Celsius. Over the last four years there has also been a four-fold increase in commitments to carbon neutrality, using 100% renewable power, and/or meeting a Science-Based emission reduction target (SBT).
These companies have combined revenues of $8 trillion and employ 18 million people around the world. (For reference, the GDP of the UK, Germany and Canada combined is approximately $8 trillion). In addition to the importance of climate action within their own operations, these companies have significant influence on their suppliers, customers and the wider world of business and government.
While 23% of the Fortune Global 500 have met or made commitments, it rises to 34% among Europe and US-headquartered companies.
“It’s clear, businesses have assumed the leadership in creating a more sustainable world. Corporates are stepping up, taking action now, and delivering impactful, immediate and measurable results that address climate change today. They realize that they don’t have time to waste on government inaction or not fulfilling the commitments to the Paris Agreement," says Stephen Killeen, Chief Executive Officer at Natural Capital Partners.
In addition, there are companies in the Fortune Global 500 making longer term commitments to climate action, up to 2050. The research found that commitments to carbon neutrality frequently complement SBTs and 100% renewable power goals. Companies with a carbon neutral commitment are four times more likely to have an SBT and six times more likely to be an RE100 signatory than companies without a carbon neutral commitment. It also showed progress in most sectors: only Business Services and Chemicals sectors are without a Fortune 500 Global company taking action or with a commitment.
Number of Fortune Global 500 companies taking action or publicly committed to deliver by 2030
|Before Paris Agreement||Today|
* RE100 was launched in September 2014
** Science-Based Target Initiative was launched in May 2015
*** This is not an addition of each of the different commitments because many companies have numerous commitments
The analysis suggests that if the growth continues in a similar way, by 2030 79% of the Fortune Global 500 will be carbon neutral, be using 100% renewable power or have met a Science-Based Target for internal emissions reductions. The focus on measuring and reporting climate risk through initiatives as the Task Force for Climate Related Disclosure (TCFD), shareholder action and rising climate awareness among staff and consumers, as well as the wavering of national commitments from governments throughout the world, are key drivers for the growth.
The Science-Based Targets programme is an initiative set up by the UN Global Compact, World Resources Institute (WRI), CDP and WWF to establish a robust, measurable approach for companies to establish internal reduction targets in line with the need to keep global temperature rise to below 2 or 1.5 degrees Celsius. The research used RE100, a programme set up by The Climate Group and CDP, to establish commitments to 100% renewable power.
Download the Whitepaper from climate solutions specialists Natural Capital Partners at info.naturalcapitalpartners.com/500