Sustainability-focused non-profit Ceres announced today the publication of its “Investor Guide to Corporate Greenhouse Gas Commitments,” a new report aiming to help investors assess companies’ climate goals and initiatives and effectively engage to accelerate climate ambition and action.
The publication of the report comes ahead of next month’s UN Climate Summit, COP26, and amid warnings from the UN-backed Intergovernmental Panel on Climate Change (IPCC) that immediate action on emissions reduction is needed in order to meet the global climate goal of limiting temperature rise to 1.5 degrees Celsius and avoid the worst impacts of climate change.
Amidst regulatory and investor pressure to address their climate impact, companies have begun ramping their emissions reduction commitments, though many have yet to set meaningful goals, and recent research indicates that a majority are not on track to hit net zero targets. According to Ceres, its analysis found that over 85% of Fortune 500 companies lack robust climate goals, and just 9% currently include climate action transition plan elements in their sustainability reports.
Laura Draucker, Senior Manager of Corporate Greenhouse Gas Emissions at Ceres, said:
“Companies have a critical role to play in limiting global temperature rise and reaching the goals of the Paris Agreement — not just because they generate large quantities of greenhouse gas emissions themselves, but because they are the ones able to drive new business models, create breakthrough technologies, and push for the policy changes we need to make this future a reality. To lead on climate, companies must first set robust goals.”
Draucker added that the new guide “demystifies the growing array of corporate climate commitments,” giving investors the ability to engage and push companies for stronger ambition and action.
The guide includes a background on climate commitments, ranging from emissions reduction and energy efficiency goals to science-based target setting and net zero pledges, pointing investors to several of the leading initiatives and frameworks that companies and investors can follow, such as the Science Based Targets initiative (SBTi), and Climate Action 100+. The report also includes a series of initiatives investors can take to promote climate action, including direct dialogue, shareholder resolutions and proxy voting, as well as promoting the ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More activities of company peers, and media campaigns to raise public pressure.
The guide also provides investors with a series of fact sheets on a variety of topic areas, containing detailed information on the topic area, red flags investors to watch for, questions to ask and recommendations to make. The fact sheet topic areas include Clean Energy Goals, GHG Reduction Goals and Science-Based Targets, Net Zero and Carbon Neutrality Goals/Carbon Credits, Scope 3 and Transition Plans, and Just and Inclusive Economies.
Commenting on the publication of the guide, Alberto Carrillo Pineda, Co-Founder and Managing Director of SBTi, said:
“Not every climate commitment is aligned with what science tells us is needed to halve global emissions before 2030 and achieve net-zero before 2050. This guide is a very valuable resource to equip investors so that they can use their positions of influence to accelerate immediate transformation consistent with what science indicates is necessary to avoid catastrophic climate change.”
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