The corporate journey to carbon neutrality

1 / Summary

• Research indicates that publicly listed companies account for 40% of global greenhouse gas (GHG) emissions
• Nearly half of the largest publicly traded companies have committed to reduce their emissions
• Today, around 370 companies are RE100 members committed to sourcing 100% of their electricity from renewable sources. Combined, they consume more electricity than the entire UK economy and are sourcing 45% of their electricity needs through renewables
• More than 2,250 companies are working towards setting science-based targets and commitments to reduce their GHG emissions, equivalent to more than a third of global market capitalization
• China will be central to corporate ambition since the country is the world’s largest emitter of greenhouse gases in volume terms and houses one third of global manufacturing
• Asset managers are providing innovative investment solutions to multinationals as they look to invest in renewable strategies

2 / Terminology

In the effort to curb global warming following the Paris Agreement, many governments, corporations, and investors have pledged to reduce greenhouse gas (GHG) emissions down to zero in net terms by 2050. Terms like “carbon neutrality”, “net-zero”, and “decarbonization” have been around for a while, but in the last few years, they have become if not the central part of corporate strategies, then at least requiring thoughtful consideration as investors and consumers increasingly demand action.

Carbon neutrality means that any CO2 released into the atmosphere from a company’s activities is balanced by an equivalent amount being removed, for example with the use of offsets. Although sometime used interchangeably, net zero is different. Net zero means making changes to reduce emissions to the lowest amount – and then only offsetting the remaining emissions as a last resort. Net zero also extends beyond CO2 and includes other GHGs, such as methane and nitrous oxide. Decarbonization encompasses all measures through which a business sector or a company reduces their carbon footprint, primarily its GHG emissions, in order to reduce its impact on the climate. This also includes direct air capture and storage (DACS) of CO₂.

Click here to download the full article.