The tech industry is way ahead of the curve when it comes to setting climate goals, particularly compared to other major industries.
A new report out today from Climate Impact Partners, an organization that develops carbon market solutions, found that only 42% of Fortune Global 500 companies have taken climate action or committed to doing so by 2030. By contrast, more than 80% of tech companies within that group have done so, the highest percentage of any sector.
The report defines actions or commitments as one of four publicly stated aims: going carbon neutral, reaching net zero, setting science-based targets or securing 100% renewable energy.
The report analyzed the climate commitments of the 500 largest companies in the world by annual revenue. Together, they're responsible for at least 15% of global emissions (or more than 5.6 billion tons of carbon dioxide equivalent) annually. That means that the commitments they make — or don't — have a major impact on the climate.
The tech industry is more consumer-facing than some other sectors in the analysis, and public pressure may factor into why companies are more likely to set climate targets. In many cases, there are also readily available solutions, such as switching data center operations to run on renewables, compared to other industries. Industries like aerospace and defense, for example, have a much steeper path to decarbonization and under 20% of companies in those sectors have set a 2030 or sooner goal.
Still, some of the biggest tech companies haven't set 2030 climate goals. Though nearly 90% have made a major climate commitment for mid-century, under 10% have set goals between 2031 and 2050.
"Setting targets well beyond 2030, a critical decade to align with the goals of the Paris Agreement and limit warming to 1.5 degrees Celsius, indicates a lack of urgency and ambition," the report authors wrote.
“We’re encouraged to see more and more companies from this prestigious group put a stake in the ground and make climate commitments," Saskia Feast, Managing Director of Global Client Solutions at Climate Impact Partners said in a statement. "There are some signals, however, that ambition and urgency might be waning. Much of the growth in commitments this year has been driven by targets set well beyond 2030, which we know is a critical decade for the planet."
Indeed, the report also found that Fortune Global 500 companies that made climate commitments within the last year were more likely to have set 2050 goals than 2030 goals. And although almost 40% of these companies have any sort of net zero target, nearly a third of them exclude Scope 3 emissions from those targets. Scope 3 emissions include those from companies' supply chain partners and typically make up the bulk of companies' footprints. A serious climate plan needs to address these emissions, yet more than 20% of the world's biggest tech companies only include Scope 1 and 2 emissions in their net zero targets, omitting Scope 3 entirely.
The good news is that things are moving in the right direction, although perhaps not quickly enough. This is the fourth year of Climate Impact Partners' analysis of Fortune Global 500 companies and their climate commitments, and an increasing number of these companies are making specific and achievable climate commitments compared to years past. The group observed an 11% increase in companies with a 2030 commitment, 22% increase in companies with a 2050 target and 50% increase in companies making a net zero commitment.
Now, companies actually need to follow through.
Climate TRACE's data show emissions at the facility-level.
Image: Climate TRACE