Climate Action 100+ (CA100+) has warned that company progress on net-zero commitments is not being matched by the development and implementation of credible decarbonisation strategies.

Its interim update on the Net Zero Company Benchmark assessment, which looks at assessments from March to October, found that while focus companies continue to make progress on net-zero commitments, too often they are not being met with credible transition plans showing how they will be achieved.

The update revealed that 75 per cent of focus companies had committed to net zero by 2050 across all or some of their emissions footprint, up from 69 per cent in March 2022.

Furthermore, the proportion of focus companies that have set long-term targets increased by 9 percentage points from March 2022.

Almost all (92 per cent) of focus firms had some level of board oversight of climate change, up from 90 per cent, and 91 per cent had aligned with TCFD recommendations either by supporting the TCFD principles or employing climate-scenario planning, up from 89 per cent.

CA100+ noted that while they were mindful of current external factors, including the short-term energy security crisis, investors consider the development of corporate decarbonisation strategies a key priority.

Furthermore, while focus companies were incrementally improving their disclosures under the disclosure framework, the latest alignment assessments suggested their real-world activities are not yet demonstrating any meaningful shifts in business models at some firms to align with the Paris Agreement.

Whilst 82 per cent of focus companies have set medium-term targets, only 20 per cent have established ambitious medium-term targets that cover all material scopes and are aligned with a 1.5°C pathway.

One in 10 (10 per cent) of focus companies have set short-term targets (up to 2025) that are aligned with a 1.5°C scenario and cover all material emissions.

Although 53 per cent of companies have a decarbonisation strategy in place to reduce their greenhouse gas emissions, only 19 per cent of focus companies quantify key elements of their decarbonisation strategies with respect to the major sources of their emissions, including Scope 3 emissions where applicable.

Just over half (51 per cent) of focus companies have comprehensive commitments for net zero by 2050 or sooner that cover all material greenhouse gas emissions, including material Scope 3 emissions.

This was the final round of benchmark assessments to be published by CA100+ in the initiative’s first phase.

The initiative has announced a new consultation on a set of proposals to enhance the Net Zero Company Benchmark.

Commenting on the findings, IIGCC CEO and global steering group member, Stephanie Pfeifer, said: “Looking back over the last five years of CA100+ there has been demonstrable progress, particularly in Europe, by some of the world’s largest carbon emitting companies in acting on climate change; in this regard CA100+ has clearly been a force for good.

“However, we must be under no illusion about the need for more urgent action by all companies and impactful corporate engagement by investors to support global efforts to limit the temperature rise to 1.5°C. The challenge – and opportunity – for phase two of the initiative is clear.”

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