The world’s largest private companies fail to set climate targets: report

The world’s largest private companies fail to set climate targets: report

PARIS, April 22, 2024 (BSS/AFP) – Only 40 of the world’s 100 largest private companies have set net-zero carbon emissions targets to fight climate change, according to a report released Monday, lagging far behind public companies .

But if the world wants to meet the 2015 Paris Agreement to limit global warming to 1.5 degrees Celsius, all companies must reduce their planet-warming emissions, according to the group’s Net Zero Tracker report.

The lack of market and reputational pressure on private companies compared to listed companies, along with a lack of regulation, are to blame for their slow implementation of climate commitments, John Lange of Net Zero Tracker told AFP.

“I think things are changing on all three fronts,” he added.

The report compared 200 of the world’s largest public and private companies based on their reported emissions reduction strategies and net zero targets.

It found that only 40 of the 100 private companies assessed had net zero targets, compared to 70 of the 100 listed companies.

Of the private companies that have set targets, only eight have published plans on how they plan to achieve them.

“A promise without a plan is not a promise, it is a naked PR stunt,” the report said.

– Regulations coming –

Only two companies – furniture giant Ikea and US engineering giant Bechtel – ruled out using controversial carbon credits to reach their net zero targets, the report said.

Carbon credits allow companies to offset their emissions by spending money on a project that reduces or avoids emissions, such as protecting forests, but critics say they allow companies to continue polluting.

Meanwhile, none of the eight fossil fuel companies included in the report were found to have a net-zero target, compared to 76 percent of the largest public companies in the sector.

There was also little improvement in the numbers compared to a previous analysis from 2022, “despite a huge increase in regulation around the world,” Lang said.

Several jurisdictions, including the United Kingdom, have adopted climate disclosure regulations.

Others have regulations on the horizon, with business centers in California and Singapore requiring reporting on greenhouse gas emissions from 2027.

The European Union has also introduced two climate regulations – the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) – that will soon require thousands of major companies to report and take action on their climate impacts and emissions. to shorten them.

“We’re trying to get private companies to understand what’s in store for them,” Lang said.

– ‘Trickledown effect’ –

In particular, the EU policy will have far-reaching consequences as it targets not only companies based in the bloc, but also companies headquartered elsewhere and branches or subsidiaries within member states.

Yet the report singled out two European private companies, including French hypermarket chain E. Leclerc, for setting emissions reduction targets.

E.Leclerc told AFP that the company has committed to more sustainable practices, such as eliminating the use of single-use plastic bags, and is “committed to setting company-wide emissions reduction targets in the near term.”

But with enforcement of EU regulations on the horizon, companies won’t be able to ‘dodge’ climate targets for much longer, Sybrig Smit of the NewClimate Institute told AFP.

“It’s actually quite foolproof. If companies want to do business in Europe, they will have to face the consequences,” she said.

The companies analyzed account for roughly 23 percent of the global economy, with the majority based in China, the United States or EU countries – the biggest emitters of greenhouse gases, Lang said.

Any changes companies make to comply with the new regulations will have significant environmental benefits.

“They have such a trickle-down effect. When such a large company implements something real, it will have a huge effect on the rest of the industry they operate in,” Smit said.