One-third of businesses missed emissions targets in 2021

As the world’s leaders once again blow hot and cold at a global climate conference, a new study has revealed that one-third of businesses missed their 2021 scope 1 and 2 emissions targets. Even as the number of firms bothering to set emissions goals grows, then, the study suggests a sizeable portion of firms are more concerned with being seen to be concerned with climate change, than actually tackling it.

In 2021, the 26th United Nations Climate Change Conference (COP26) was hosted in Glasgow, under the presidency of the UK. Heralded at the time as a key moment for decisive change, days of pleasantries and platitudes exchanged between world leaders once again failed to translate into concrete action.

One year on, the UN seems to have learned one key thing from the conference. Nothing in particular about the event, its esteemed attendees, or how they will intermix seems to have changed. But like FIFA before them, the organisers of COP27 look to have realised that if you want to host a lavish get-together for the world’s most powerful people as the planet burns – and to avoid criticism while you do it – it’s best to shift it to an authoritarian state, where you can more efficiently ‘deal’ with anyone turning up to protest.

COP27 is set to take place in Egypt – and famous climate campaigner Greta Thunberg has already said she will not be bothering to attend. It might not be difficult to see why, considering the Egyptian authorities’ attitudes to protest. Assurances have been made that there will be space for protesters to gather at COP27 – but only in a purpose-built corral, on a desert highway, away from the conference centre.

With world leaders setting such a fine example, when it comes to being held accountable for their actions or inaction on climate change, it is unlikely to come as a shock that many private enterprises seem not to be taking their emissions commitments seriously either. A new study from Bain & Company has outlined the rising number of businesses setting green targets – but also noted that even as this is rising “exponentially”, one-third of firms did not even achieve the emissions targets they aimed to hit by 2021.

Torsten Lichtenau, Global Lead of Bain & Company’s Carbon Transition Practice, remarked, “There is a very steep rise in the numbers of businesses committing to or setting decarbonisation goals. This is very positive for the planet. But while ambition is an important, true differentiation will come from ambition matched with the commitment and determination to deliver the targets in a consistent as well as a cost-effective way.”

Bain found that with the fourth quarter of 2022 still to play out, there has already been a 77% increase in the number of companies having committed to or set a science-based targets, taking the total to 3,784 in the lead up to COP27. But according to Lichtenau, in the long-term, companies will need to be able to “commercialise” these low carbon offering to their customers, in order to make it “viable” as a business model. This “essential next step” seems to be a long way off for many companies. A shocking 33% of companies missed their absolute scope 1 and 2 targets expiring in 2021, according to Bain’s analysis of the latest CDP disclosures.

At the same time, the global recession looks to have jeopardised what companies now believe is ‘viable’ in terms of their net-zero ambitions. Bain’s study suggests that “this year more than ever, companies find themselves in the position of needing to look beyond setting ambitions to tackling the real challenges of decarbonising and finding ways to monetize it with customers. Many corporations that set ambitious targets for COP26 are wrestling with what they can now afford to do.”

That follows recent research that stated CEOs are already scaling back ESG plans, in a bid to secure their short-term bottom-lines. And while investors have threatened to withdraw from companies which are not proactive on the matter of climate change, they have also noted they would be unwilling to support sinking funds into sustainability in a way that compromised their ability to profit from a firm they backed. What seems increasingly unlikely that the market will provide a solution to any of this then. The issue is, the idea of world leaders – or at least the incumbents attending COP27 – taking action to address that, also looks increasingly remote.