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October 27, 2021updated 23 Jun 2022 6:49am

Exclusive: The companies with the most ambitious net-zero targets

Capital Monitor has mapped out the net-zero targets of 755 companies globally that have been approved by the Science-Based Targets initiative. Here we analyse the findings.

By Polly Bindman

Some companies are aiming higher than others. (Photo by olm26250/iStock)
  • Analysis of science-based targets reveals what different sectors are committing to in terms of net zero, and which are the leaders and laggards.
  • Scope 3 emission targets are less ambitious than those under scope 1 and 2, suggesting companies need guidance on tackling supply chain emissions.
  • Many financial institutions have made net-zero pledges, but it is still unclear exactly how they will align their portfolios to match their own targets.

The number of companies committing to reaching net-zero emissions by 2050 is hard to keep track of. Corporates across the globe are scrambling to set targets that align with scientific consensus, in line with recommendations by the International Energy Agency and Intergovernmental Panel on Climate Change.

Yet distinguishing between net-zero commitments is not always easy. And the current lack of regulation, policies and required disclosures will mean such targets amount to nothing more than a vague ambition set beyond the working lifetimes of the executives who have signed them off, says a late August report from investment bank Jefferies.


For example, while just over one-fifth of the world’s 2,000 largest companies by revenue have made net-zero pledges, only 20% of those pledges align with science-based targets. As Jefferies notes, the value of such goals is that they align a corporate emissions pathway with the Paris Agreement in the short and long term.

But scepticism has been growing around net-zero commitments amid concerns over potential gaming of carbon reporting and a lack of accountability over what has been promised. There are worries that companies are merely paying lip service to carbon cutting to keep investors and regulators happy and are well short of where they should be in reaching their goals.

Interim net-zero targets

Still, some companies are establishing interim emission-reduction targets, along with strategies outlining how they plan to achieve their ambitions. It is important to clarify that net zero does not mean zero carbon. While the latter means eliminating one’s carbon output, reaching ‘net zero’ refers to the process of ensuring every single molecule of greenhouse gas emissions one is responsible for will, at least, be offset.

The retailing sector has one of the most ambitious average net-zero targets: to cut absolute emissions by around 58% by 2029, or within 12.2 years of the target being established.

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Hence typically carbon-intensive sectors, such as aviation or energy, are in a position to commit to reaching net zero by 2050. Companies that have developed science-based targets, which have been officially approved by the Science-Based Targets initiative (SBTi), provide the best indicators of what a feasible objective looks like.

Most interim objectives set by companies, including SBTi’s, are written pledges that are hard to compare across companies and sectors. So Capital Monitor has visualised the science-based targets of 755 companies for which there was clear accessible data.

So far 2,007 companies have committed to establishing net-zero science-based targets, but only 983 have had them approved by the SBTi. All of these companies aim to reach net zero by 2050 and have established roadmaps for how to get there.

While all targets approved by the SBTi are supposed to be credible, it is possible to get a sense of how ambitious average targets are for each sector by viewing their average emissions targets alongside the number of years each company gives itself to complete that target.

The SBTi also categorises targets into those that align with a future of 1.5°C above pre-industrial levels by 2050 (in line with the 2015 Paris Agreement) – and those that align with well below 2°C or well below 1.5°C.

The scientific consensus is that emissions must remain 1.5°C below pre-industrial levels to avoid the most drastic effects of global warming; 640 out of the 983 companies with approved science-based targets are aligned with a 1.5°C scenario.

Different sectors' net-zero ambitions

Focusing on absolute emission reduction targets only, the data shows that the retailing sector has one of the most ambitious average net-zero targets. Based on the 40 companies in the sample, the average goal is to cut absolute emissions by around 58% by 2029, or within 12.2 years of that target being established.

By contrast, the average target for the 12 transport companies in the sample is around 42% within a similar time frame. The mining sector is even less ambitious, setting an average target of around 35% by 2030, or within 12.3 years.

While the SBTi offers specific recommendations for some sectors, such as ‘apparel and footwear’, based on a series of criteria, including anticipated growth of the sector, there are no firm recommendations for the amount of emissions each company should aim to cut by a certain time. The SBTi has even drawn criticism from some organisations, including non-profit Urgewald, for not considering an individual company’s emissions within the target-setting process.

It does, however, offer recommendations for the percentage by which a company should aim to reduce its emissions in a certain time frame to be in line with certain scenarios. For example, companies in the apparel sector are recommended to make a minimum absolute annual linear reduction of 4.2% to align with a 1.5°C future.

These charts also reveal leaders and laggards among the signatories. For example, UK-based Burberry stands out with its commitment to reduce scope 1 and 2 emissions by 95% by 2022, or within six years of setting its target. By contrast, Germany’s Puma only plans to reduce its emissions by 35% by 2030.

It should be noted that the SBTi has committed to phasing out from its approved list those companies with a higher-than-1.5°C scenario target within the next four years. Being excluded could impact their ability to access capital as freely. As Capital Monitor has previously reported, while SBTi targets are by no means perfect, they represent the most reliable indicator of a company’s net-zero ambitions.

Different scopes

The SBTi recommends that companies meet scope 1 and 2 targets (which cover their own direct and indirect emissions) by implementing strategies to cut emissions, such as investing in less-carbon-intensive technologies. Crucially, however, it recommends that for them to reduce scope 3 emissions – indirect ones from their supply chain – they must develop additional engagement strategies. These could incorporate investment stewardship or ensuring that suppliers are committed to science-based targets.

As the data reveals, scope 3 targets tend to be less ambitious than scope 1 and 2, but this does not mean they are less important. As research has shown, scope 3 often accounts for the biggest share of a company’s emissions by a significant margin. However, far fewer companies track and disclose scope 3 emissions than they do scope 1 and 2.

For financial institutions, the huge challenge is to align entire investment or lending portfolios with pledges to hit net zero by 2050.

In addition to their rapid, en masse adoption of net-zero pledges over the past few months, a few investors are even starting to incorporate SBTi targets within their policies. For example, British insurer Aviva’s strict policy of divesting from companies that derive more than 5% of their revenue from coal has an exception for those signed up to the SBTi.

This places the impetus on more and more companies to adopt net-zero targets that are SBTi-approved. It is likely that, over the coming months, the number of companies with such commitments will greatly increase.

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