UK companies leading in setting validated science-based net zero targets

The net-zero ambitions of Britain got a major boost last week as a report highlighted how UK companies are leading globally in setting corporate science-based net zero targets along with Japan and the US.

The UK has the most ambitious net zero target in the world and the corporate world forms an essential part of it as the country nears the 2030 net zero target deadline.

UK firms on setting science-based net zero targets

The research classifies global companies based on their commitment to set climate targets and their performance on already set targets. It also differentiates between the companies whose climate targets have been validated and those whose targets haven't been validated. Based on these yardsticks Britain has come out as a leader as it has the most number of companies with a science-based net zero target which has been validated, followed by the US and Japan

According to the SBTi 2022 Target Monitoring Report done by the Science Based Targets Initiative (SBTi), the UK has the highest number of firms (722) that have validated science-based net zero targets followed by the US (585) and Japan (398).

However, in terms of setting science-based net zero targets, Japan has more companies than the UK and the US.

In terms of setting science-based net zero targets, Britain comes second with 181 businesses setting targets while 201 companies in Japan have set targets. There was a significant increase in corporate climate action in the UK which is in line with the global acceleration of climate action.

The report also tallied how the UK FTSE 100 companies fared in terms of climate targets, either with already set science-based net zero targets or committing to set such targets soon. By the end of 2022, 69 per cent of the UK firms listed in the FTSE Index were estimated to have science-based net-zero targets.

While the SBTi report was being conducted in 2022, 45 companies in the UK FTSE 100 companies already had set science-based targets and 24 more businesses had committed to set targets.

SBTi is a well-known global organisation that validates and promotes best practices in setting climate targets following the goals underlined in the Paris Agreement which seeks to limit global temperature rise to 1.5C.

This comes at a time when the UK has announced that they will adopt globally approved sustainability standards in order to reduce corporate greenwashing.

Other countries' position in setting science-based net zero targets

The report further highlights how global companies across the world have improved in setting more efficient climate targets by comparing the climate goals set by companies over a decade. In this department, the overall percentage of global companies setting a science-based net zero target has increased by 87 per cent in 2022.

The SBTi report emphasised how the increase in the number of global companies setting science-based net zero targets last year has surpassed the number of businesses whose targets have been validated in the last seven years. In 2022, 1097 global businesses took corporate climate action, which is more than 1082 companies setting targets in the last seven years.

According to the data, the world is moving towards more corporate climate action taking companies in the NIKKEI Index into account. Studies show around 40 per cent of the companies in the Index were likely to have set science-based net zero targets in 2022.

Furthermore, 34 per cent of the global economy based on market capitalisation either have science-based targets or have committed to setting one.

Looking at the data, which clearly stresses the importance of setting science-based net zero targets in corporate climate action, we can see the rise in the number of global companies with validated climate targets in 2022. At present, companies in 61 nations have validated climate targets while companies in 16 other countries have committed to setting targets.

Additionally, for the first time, companies in five new countries, Trinidad and Tobago, Sierra Leone, Liechtenstein, Argentina and Morocco have made commitments to setting science-based net-zero targets.

On the other hand, companies in five other countries, Romania, Malta, Albania, Myanmar and Tunisia have already set science-based net zero targets for the first time. This marks a new start of corporate climate action in these regions.

Industry-wise assessment of corporate climate action

The report further categorises global companies into different sectors like manufacturing, services, hospitality, healthcare, etc., in order to understand which section is making the most climate change impact.

Three sectors (manufacturing, infrastructure and services industry) are leading globally in setting science-based targets in 2022 as more than 60 per cent of global companies that set a target came from these three. Companies from the service sector lead the chart followed by the manufacturing and infrastructure sector.

In comparison, power generation, biotech, healthcare and pharma, along with the hospitality industry, have shown the least growth in setting science-based targets. SBTi has underlined that these sectors need urgent improvement to corporate climate action.

Stricter corporate climate action evaluation

SBTi's research clearly demarcates that the new yardstick of accepting new science-based targets will be their alignment to the 1.5C temperature protocol. This means a stricter climate target evaluation protocol for global companies

Speaking about the new figures, the Chief Executive of SBTi, Luiz Amaral, stressed the increasing demand for corporate climate action.

Amaral drew attention to the recent climate change-related catastrophes happening across the world, including the deadly heatwaves and wildfires in Europe and the floods in Pakistan. Amaral asked global companies to act now as the world is gripped by the economic cost of climate change.