The world’s largest companies are increasingly setting significant climate-related targets, despite facing increasing the challenges they are facing from anti-ESG political backlash and growing scrutiny over greenwashing in their environmental claims, according to a new study released by carbon markets-focused solutions provider Climate Impact Partners.

For the study, Climate Impact Partners assessed the climate commitments of the Fortune Global 500 companies, the top five hundred largest companies in the world by revenue, examining data sources including company websites, press releases, and annual company reports.

Among the key findings in the study was a reacceleration in the pace of net zero commitments by companies, with 45% of companies having set a net zero target, up 6 percentage points from 39% in 2023, and after rising only 2 percentage points in 2022. The findings represent significant growth over the past several years, with only 8% of companies having had a net zero target in 2020.

While climate commitments are growing, however, Climate Impact Partners noted that “there are some signs that companies are being less vocal” about their goals and achievements, with companies facing increasing scrutiny from greenwashing-wary regulators over their green claims, and ESG politicization. The report found, for example, that some companies are not mentioning their carbon neutrality achievements in the sustainability reports, noting increasing regulatory scrutiny such as a ban on carbon neutral claims on consumer-facing products in the EU’s proposed Green Claims Directive.

Sheri Hickok, CEO of Climate Impact Partners, said:

“Companies may be continuing their climate action quietly, but we should be celebrating this increase in corporate commitments loudly.”

Notably, the report found the greatest acceleration in “significant climate targets” – defined as having an RE100 commitment to supply 100% of electricity from renewable sources, a science-based target, or a carbon neutral or net zero by 2050 commitment – among North American companies, despite the significant anti-ESG political movement in the U.S. According to the report, 79% of North American companies now have a significant climate target, up 6 percentage points from 73% last year, with Asian companies at 46%, up one percentage point, and European companies leading, but remaining flat over the past year, at 95%.

The report also examined the use of carbon credits in companies’ climate strategies, finding that 42% of companies now explicitly state that they will use carbon credits to meet their targets, up from 40% last year, while 2% of companies explicitly state that they will not use carbon credits.

The use of carbon credits within climate targets has faced growing scrutiny recently, with one of the most noticeable examples found in the controversy surrounding the Science Based Targets initiative’s (SBTi) announcement of plans to allow an increased role for the use of carbon credits in its upcoming revised Corporate Net Zero Standard. Following the announcement SBTi staff issued a letter indicating that they were “deeply concerned” about the plans, and reportedly called for the resignation of the CEO and board members. The organization’s CEO resigned in June, citing personal reasons, and the SBTi subsequently announced that the new standard is unlikely to allow companies to use carbon credits to offset value chain emissions.

Despite the SBTi controversy, the Climate Impact Partners study found that the companies that companies that have said that they plan to use carbon credits to meet their carbon neutral or net zero targets were twice as likely to have set a near term science-based target (SBT). Overall, 35% of companies have a near-term SBT in place, with the most significant growth over the past year in North America, with 43% of companies with a near term SBT, up from 38% in 2023.

Hickok said:

“The top earning companies know that despite economic headwinds and ESG backlash, tackling the climate crisis is critical to future-proofing their businesses. Companies need to act now, setting more ambitious targets and using vital tools such as carbon credits to accelerate progress. The Fortune Global 500 can help lead the way to turn up the volume on climate action and drive impact today.”

Click here to access the report.