The number of businesses setting ambitious decarbonization targets in order to reach Net Zero by mid-century at the latest continues to grow. According to Climate Action 100+, there has been a 17% year-on-year increase in the number of large businesses setting such targets.
But while corporate Net Zero targets continue to swell in popularity, the methods to actually deliver these targets differ. Some are relying on offsets to kickstart the journey, while the concept of “greenhush” – whereby corporates don’t publicly outline decarbonization efforts – has grown in prominence in recent months.
A new major report from ENGIE Impact, however, suggests that the vast majority of firms are making progress again ambitious decarbonization targets, but mainly by delivering quick wins, such as public targets setting and decarbonization across Scopes 1 and 2, where they have direct control and influence.
ENGIE Impact’s 2023 Net Zero Report studies more than 500 major businesses, each employing more than 10,000 people. Of the 505 executives surveyed, 62% claimed that they had made a public commitment to ambitiously reduce carbon emissions across the organization and 98% of companies have made some sort of progress towards these targets.
While this is an increase compared to ENGIE Impact’s previous report, only 12% of companies rate their ongoing sustainability efforts as “extremely successful,” and 75% say they have already achieved the “quick wins” in their decarbonization plan.
Quick wins range from publicly announcing a Net Zero target to implementing operational improvements to help reduce emissions. However, only 12% of surveyed businesses feel they are “on track to meet or exceed their ambitious decarbonization goals”, with many facing new challenges now that the low-hanging fruit has been picked.
The report states that “organizations may feel they have exhausted many of the easy fixes around carbon reduction and are starting to be confronted with more challenging barriers to implementation and execution”.
It cites the lack of government incentives, the short-term mindset of the corporate investment cycles, and a “war for decarbonization talent within industries” as major challenges now facing businesses, alongside traditional issues such as a lack of internal, external, and cross-functional collaboration.