Zurich, July 4 2022 - Achieving climate neutrality as part of a net zero journey is a powerful step for companies to take towards alignment with the goals of the Paris Agreement. However, new South Pole research has found that out of about 60,000 global companies monitored, only 1,075 - less than 2% - have a corporate "climate neutrality" target in place, indicating that private sector climate ambition, let alone action, is still woefully inadequate if net zero emissions are to be reached by 2050.
Moreover, the research found that of these 1,075 companies, 40% claimed they had already achieved climate neutrality, but only about one fifth (18%) have set or committed to setting a science-based target (SBT) – which is currently the most credible way to demonstrate a comprehensive carbon reduction and removal strategy in accordance with science.
South Pole, a project developer and climate solutions provider, recommends companies use a two-pronged approach of setting and implementing science-aligned decarbonisation targets and offsetting remaining emissions. On the one hand, it is imperative to set a science-based target and establish detailed plans to reach it. On the other hand, companies should compensate for any unavoidable emissions that occur along the way, as per the South Pole Climate Journey to net zero emissions. Both strategies are needed to fulfil climate ambition, and should not be played off against each other.
This global research, a first to analyse climate-neutral commitments and claims in the context of alignment with science, focused on the 1,075 companies out of nearly 60,000 corporations who have declared they have set a climate neutrality target. The findings clearly show that companies still need incentives to commit to climate action. Of the few businesses that do commit and declare climate neutrality, 82% still fall short from credible, science-based plans to decarbonise.
Brands and companies have a lot to gain by integrating sustainability into their value proposition for consumers. Environmentally conscious households are worth $446 billion to the Fast-Moving Consumer Goods (FMCG) industry, (Kantar 2021). However accusations of greenwashing have gained momentum lately, and litigation cases related to green claims have doubled between 2017 and 2020 (UN Global Climate Litigation Report 2020). Simply claiming climate neutrality is not good enough any longer and could lead to accusations of greenwashing if they are not backed by science-based targets – vital for setting a credible roadmap for decarbonisation.
"In spite of the buzz around a record number of climate neutrality claims, reality is that the vast majority of companies are still sitting on the fence. We hope that businesses understand that this is an opportunity to showcase the progress they're making on their climate journey, rather than to be afraid of scrutiny. South Pole can support and help with this journey, to give guidance on using the correct labels, and provide experts who understand the terminology in this sector inside out," says Renat Heuberger, South Pole CEO.
South Pole's Climate Neutral labels adhere to best-practice reporting guidance of the SBTi and the GHG Protocol. This means that organisations can make robust claims in line with the latest findings of climate science and customers can be assured of the robust methodology that organisations undergo in order to achieve the label.
South Pole, a social enterprise recognised by the World Economic Forum's Schwab Foundation, is today the world's leading climate solutions provider and carbon project developer. Since its creation in 2006, it has developed nearly 1,000 projects in over 50 countries to reduce over one gigaton of CO2 emissions, and to provide social benefits to less privileged communities who are particularly vulnerable to climate change. Projects range from sustainable agriculture, forest conservation, waste management, to energy efficiency and decentralised renewable energy. South Pole also advises thousands of leading companies on their sustainability journeys to achieve net-zero emissions. With its global Climate Solutions platform, South Pole develops and implements comprehensive strategies that turn climate action into long-term business opportunities for companies, governments and organisations around the world.
South Pole is committed to becoming a B Corp globally across all of its local entities, building on its existing B Corp certification in Australia and the U.S.
For more information, visit www.southpole.com or follow us on LinkedIn, Twitter, and Facebook.
South Pole's market insights database contains and monitors close to 60,000 global companies, including the Global Fortune 500, major stock indices, and all CDP and GRI reporting companies, and their publicly disclosed sustainability commitments data. The 'Claiming climate neutrality: The top four priorities' report analysed those approximately 60,000 companies as per April 2022.
Isabel Hagbrink, Director of Global Communications
i.hagbrink@southpole.com ·
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