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Private sector: who’s really committed to Net Zero carbon emission targets?

Private sector: who’s really committed to Net Zero carbon emission targets?

3 minute read

In 2021, as the Western World begins to find its feet again after the Covid-19 pandemic, attention is beginning to return to climate change, and the urgent need for countries around the world to reach Net Zero emissions.

In Europe, policymakers both within and outside the EU have set ambitious targets for decarbonisation: the EU aims to reach Net Zero emissions by 2050 while the UK has set an even more ambitious target to reduce over 78% of carbon emissions by 2035 from 1990 levels.

Media coverage over the summer of 2021 has focused intensely on the audacity and pragmatism of such policies, but many have been left wondering to what extent policy translates to progress, and whether private companies share the same drive to reach Net Zero as the polities in which they operate.

Retail Economics and Accenture analysed over 2000 company policies across the UK and Europe to discern the extent to which these companies acknowledge the sense of urgency that is required of them, if the UK and the EU are to truly achieve decarbonisation by the middle of the century.

This is the first of a four-part article series which looks at forecasting the private sector’s path to Net Zero emissions. It forms part of a wider piece of research featured in our report entitled ‘The Path to Net Zero Carbon Emissions’.

[continued below]Sustainability net zero carbon emission targets - Retail Economics

 

Target differences across Europe

The most glaring feature of the data gathered so far is the significant disparity in target setting between different European countries. The UK is ahead of its European peers. Around two thirds (64%) of the top 100 publicly listed companies in the UK have net zero targets. This represents 87% of total turnover among the top 100 UK companies, and 90% by market capitalisation. This compares to just a third of the top 100 French companies that have a net zero target, and represents less than two thirds (62%) of revenue, but 83% of market capitalisation among its top 100 companies.

 

Proportion of top 100 companies with Net Zero carbon emission targets

Proportion of top 100 companies with net zero carbon emission targets - Retail Economics

Source: Retail Economics/Accenture, based on sample of top-100 largest publicly listed European companies by market capitalisation in the UK, Germany, France and the Rest of Europe, for net zero commitment

 

Does size matter?

Our research shows that the largest 20 companies are significantly more likely to have clear net zero goals, evident in each of the four markets analysed. In the UK, four in five of the top 20 companies have net zero targets, compared to three quarters in Rest of Europe and Germany, and two in five in France. Interestingly, Germany shows the greatest gap between the largest 20 companies and the largest 100, falling from 75% of companies to 42% respectively.

The research shows that less than half (47%) of the 400 largest companies across Europe have committed to a net zero carbon emissions target date. The stark reality is that the vast majority of European corporates currently lie outside of the climate action debate, severely impairing the ability of business to play its part in mitigating the worst effects of climate change. Indeed, our research included a search of over 2,000 of the largest European companies, out of which over 80% of companies have no targets at all. 

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Found this short article interesting?

This short insight article forms part of a series based on research detailed in a thought leadership report entitled “The Path to Net Zero Carbon Emissions” produced by Retail Economics in partnership with Accenture. It analyses over 2000 company policies across Europe (top 100s by market cap) to assesses the level of commitment within the private sector concerning carbon reduction emission targets and the goal to net zero by 2050.  

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