Climate change will take center stage at Davos this week as the World Economic Forum (the Forum) convenes world leaders to shape global, regional and industry agendas and further the Forum’s mission of “improving the state of the world.”
In the lead up to Davos, the Forum commissioned Optera (formerly POINT380) to analyze corporate sector climate performance since the Paris Agreement. Optera leveraged data collected by CDP and reviewed the reported greenhouse gas emissions and targets of thousands of companies from 2015-2018.
Here is what the data revealed:
Utilities Lead the Way
Nearly three quarters of all reported corporate emissions come from three sectors: Utilities, Materials, and Energy. Utilities have reduced emissions more than 20 percent since 2015. This outpaces even the IPCC 1.5 degree pathway. Companies in other industries have in turn benefitted from these reductions. Operations that rely on electricity for most of their energy needs have reduced their scope 2 emissions via utility grid cleaning and increased renewable energy procurement.
Current targets are not ambitious enough to maintain emissions reduction trend
In 2019, approximately 2,300 companies reported emissions targets to CDP. Of these targets, roughly half align with the Paris Agreement, and a quarter align with the IPCC 1.5 degree scenario. This indicates that not enough companies have set science-based targets, and that a significant portion of current targets are not ambitious enough.
It’s time to talk scale
The analysis underscores two key takeaways:
First, there is a path forward. In its analysis, Optera found examples of corporate leaders across all industries that are setting and achieving ambitious emissions reductions. These leaders are paving the way for others to follow.
Second, scale and performance are key. With the climate crisis looming, a focus on disclosure and operational emissions is no longer enough. Companies’ climate contributions should be evaluated based on their emissions reductions relative to climate science, and on their efforts to magnify impact through collaborative initiatives.
Read more about the analysis and its findings in Forbes.