Quietly closing the gap between climate ambition and action.
Invert Inc.
A carbon-reduction and removal company committed to empowering businesses and individuals to take bold climate action.
Earlier this week, Climate Impact Partners released their annual Fortune Global 500 Report, Quiet Climate Action. The 2024 report presents a detailed analysis of corporate decarbonization strategies, with a specific focus on the evolving role of carbon credits within Fortune Global 500 companies. Key findings indicate a steady increase in corporate commitments to net-zero targets, with 45% of these companies aiming for net-zero by 2050, up from 39% the previous year and 8% in 2020. Carbon credits play a significant role in these strategies, with 42% of companies explicitly stating their intention to use them to meet carbon-neutral or net-zero goals.
The report counters the misconception that the use of carbon credits distracts from focusing on internal emission reductions. In fact, companies utilizing carbon credits are found to be twice as likely to set near-term Science-Based Targets (SBTs) and three times more likely to address their entire value chain in their net-zero targets. This aligns with research showing that companies actively purchasing carbon credits are also those making the most progress in reducing internal emissions.
However, despite the growing uptake of carbon credits, challenges persist in ensuring their credibility and the consistency of corporate commitments. The Science-Based Targets Initiative (SBTi), a popular framework for setting rigorous net-zero pathways, has seen a slight decline in corporate alignment due to the stringency of its requirements. Moreover, companies continue to face hurdles in reducing Scope 3 emissions, which make up the bulk of most firms' carbon footprints. Some firms are now exploring more flexible approaches, such as intensity-based targets, and using carbon credits to complement deep decarbonization efforts.
Regionally, North America has seen the largest increase in net-zero commitments despite ESG (environmental, social, governance) politicization, with 79% of companies targeting significant climate goals by 2050. In contrast, European companies, though historically ahead, have seen stagnation, while Asia is slowly increasing its climate commitments.
The report emphasizes that while some companies are less vocal about their carbon-neutral achievements due to rising scrutiny, corporate climate action remains resilient. CEOs are encouraged to continue integrating carbon credits into a balanced, credible decarbonization strategy, reinforcing their importance in achieving net-zero and fostering long-term sustainability efforts.
Invert Insights.
??This report echoes previous findings of the positive correlation between the use of carbon credits and accelerated corporate decarbonization, further invalidating the argument that carbon credits are used as a tool for passive action. Investment in carbon credits continues to be proven as an effective strategy in driving internal emissions reductions and meeting short- to mid-term targets.
领英推荐
?? The growing increase in Fortune Global 500 companies aiming for net zero by 2050 and incorporating carbon credits as part of their strategy highlights the increasing momentum toward climate action among large corporations, even as they are being less vocal about their investment. Given the reach and influence of this group, finding ways to communicate regularly, transparently, and consistently about the action they are taking is key to continuing to change the conversation around carbon credits from a tone of skepticism to one of adoption.?
??The organizations surveyed for the report come from nearly all regions of the world, with the largest representation coming from the regions of Asia (42%), North America (31%), and Europe (23%). This underscores the immense worldwide effort being taken to address climate change and further highlights the emergence of climate change as leading global priority.?
Keep reading.