More than three quarters of large companies globally have succeeded in cutting their operational emissions intensity, or the emissions per unit of revenue, since the implementation of the Paris Agreement in 2016, but less than a fifth are on track to achieve net zero emissions by 2050 – the goal required to meet the Agreement’s ambition to limit global warming to  1.5°C – according to a new study released by global professional services firm Accenture.

For the study, Destination Net Zero, Accenture examined the 2,000 largest public and private companies by revenue globally, analyzing their net zero commitments, decarbonization levers and track records of reducing operational Scope 1 and 2 greenhouse gas emissions.

The report found that the number of companies committing to net zero emissions continues to grow, although the pace of growth has slowed somewhat over the past year, with 37% of companies now having a commitment in place, relative to 34% last year, and up from only 27% in 2021. European companies are by far in the lead on this metric, with 61% having a net zero commitment in 2023, up sharply from 37% in 2021, while North American companies are lagging at 28% currently, unchanged year-over-year, and up from 23% in 2021.

The number of companies addressing their emissions footprint has grown significantly over the past few years, with 77% of those reporting emissions (around 70% of the overall sample) cutting their emissions intensity since 2016, nearly double the rate of those that reduced emissions intensity in the five years leading up to 2016, according to the report. Results were less encouraging when not adjusting for business growth, however, with only around half of companies having cut absolute operational emissions since 2016.

By industry, the utilities sector has seen the most significant emissions reductions since 2016, with an annual decline in Scope 1 and 2 emissions of 5%, and 68% of companies reducing emissions, while Software and Platforms companies on the other hand have seen emissions increase by 15% on average, with only 35% of companies reducing emissions.

Overall, the report found that only 18% were assessed to be on track to reach net zero by 2050. By region, 24% of European companies were on track for net zero by 2050, compared with 20% in North America, and only 13% in the rest of the world. 67% of European companies have reduced emissions since 2016, compared with 53% in North America, and 40% in the rest of the world.

While 70% of operational emissions come from the top 20% of emitters in each industry, according to the report, these companies lead on ambition, but to date are behind on action, with 42% of top emitters having set a net zero target, but only 31% having actually reduced emissions since 2016, well below the 50% of total companies with reduced emissions.

The report also revealed that the vast majority of companies are employing at least some decarbonization levers, with 82% implementing energy efficiency measures, 80% reducing waste, 79% switching to renewables, and 68% adopting circular principles. Of 20 decarbonization levers identified by Accenture, around 40% of companies were found to be adopting at least half, with 4% adopting 15 or more. Those found to be adopting 10 or more levers were much more likely to be reporting reduced emissions.

Jean-Marc Ollagnier, CEO of Accenture for Europe, Middle East and Africa, said:

“It’s promising to see an increase in public commitments to net zero targets again this year, but the adoption of key decarbonization measures is not uniform, with some companies still unable to master the basics. Reaching net zero is a unique opportunity for every organization to reinvent themselves and their value chains by aligning business growth with the net zero imperative, despite the many obstacles they must overcome. However, it is not just an enterprise challenge but also an ecosystem one, as there is a need to address the disconnect between supply and demand.”

Click here to access the Accenture report.