New research from Bain & Company suggests that nearly one-third of global organizations failed to keep their net zero promises for 2020. The research, released at the World Economic Forum in Davos, Switzerland, shows that 31% of businesses that set and publicized scope 1 and 2 absolute emissions reduction targets due in 2020 failed to meet them, with more than a quarter falling short by 80% of their targets.
The news comes at a challenging time for climate action, as climate researchers are sounding alarms that the world may fail to meet the 1.5°C climate warming target agreed upon during the 2015 United Nations Climate Change Conference near Paris, France. A recent report released by UN scientists predicted a 50% probability that warming will at least temporarily exceed the threshold for the period from 2022-2026.
According to the report, the number of science-based environmental targets submitted to the CDP, a non-profit that runs the global disclosure system for environmental impacts, saw a surge after the COP26 conference, nearly quadrupling from 775 in 2020 to 2,843 in April 2022. There remains a global divide in pledges, however, with 57% of science-based commitments coming from EMEA, 19% originating from the Americas, and a remaining 24% coming from APAC.
"CEOs have been bold in setting ambitious targets, while the roadmap to full delivery is still unclear and highly challenging," said Jenny Davis-Peccoud, co-leader of Bain & Company's Sustainability & Responsibility practice. "Successful leaders bring together what we call 'dreamers' and 'doers' in their executive teams to get to pragmatic solutions to visionary goals, steering toward net zero even through the macroeconomic and political turbulence in which we find ourselves."
The new research also outlines concrete steps companies can take to achieve their climate goals, such as beginning decarbonization efforts with the customer and working their way back, engaging a wider range of stakeholders in their efforts, and training and supporting climate advocates in middle management to ensure efforts are implemented directly into day-to-day operations.
As businesses continue to face pressure from all sides – from their employees, customers, investors, and governments – companies that embrace and prioritize the challenge of achieving their climate goals may benefit from the advice Bain has to offer.