{"678754":{"#nid":"678754","#data":{"type":"news","title":"Companies Are Still Committing to Net-Zero Emissions","body":[{"value":"\u003Cdiv\u003E\u003Cp\u003ECompanies around the world are increasingly committed to cutting their greenhouse gas emissions to slow and ultimately reverse climate change.\u003C\/p\u003E\u003Cp\u003EOne indicator is the number of companies that have set emissions targets as part of the \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/\u0022\u003EScience Based Targets initiative\u003C\/a\u003E, or SBTi, a global nonprofit organization. That number grew from \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/reports\/sbti-monitoring-report-2023\/global-geographic-growth#:%7E:text=Continued%20growth%20in%20the%20number%20of%20companies%20setting%20targets\u0026amp;text=2%2C080%20companies%20had%20validated%20science,institutions%20with%20science%2Dbased%20targets.\u0022\u003E164 companies in late 2018 to over 6,600 by November 2024\u003C\/a\u003E. And thousands more have committed to lower their emissions.\u003C\/p\u003E\u003Cp\u003EIt\u2019s not always a smooth road, however. Some of those companies \u2013 including big names like Microsoft and Walmart \u2013 have had to pull back on some of their SBTi commitments.\u003C\/p\u003E\u003Cp\u003EWe \u003Ca href=\u0022https:\/\/scholar.google.com\/citations?user=bHuI7f0AAAAJ\u0026amp;hl=en\u0022\u003Estudy\u003C\/a\u003E \u003Ca href=\u0022https:\/\/scholar.google.com\/citations?user=PVgZllAAAAAJ\u0026amp;hl=en\u0022\u003Ethe history\u003C\/a\u003E \u003Ca href=\u0022https:\/\/scholar.google.com\/citations?user=5nODHdIAAAAJ\u0026amp;hl=en\u0022\u003Eof SBTi pledges\u003C\/a\u003E \u003Ca href=\u0022https:\/\/scholar.google.com\/citations?user=dVu_OZQAAAAJ\u0026amp;hl=en\u0022\u003Eto understand these commitments\u003C\/a\u003E and what can undermine them. We believe there is more to the story of these pullbacks than meets the eye.\u003C\/p\u003E\u003Ch2\u003EWhat is Net Zero?\u003C\/h2\u003E\u003Cp\u003ETo understand corporate climate commitments, let\u2019s start with the concept of \u201cnet zero.\u201d\u003C\/p\u003E\u003Cp\u003EThe \u003Ca href=\u0022https:\/\/unfccc.int\/process-and-meetings\/the-paris-agreement\u0022\u003EParis Agreement\u003C\/a\u003E, an international treaty on climate change, aims to limit global warming to well below 2 degrees Celsius (3.6 Fahrenheit) and ideally to 1.5 C (2.7 F). Meeting the more ambitious target of 1.5 C will require reaching \u003Ca href=\u0022https:\/\/netzeroclimate.org\/what-is-net-zero-2\/#:%7E:text=The%20Paris%20Agreement%20marked%20the,of%20emissions%20and%20carbon%20removals.\u0022\u003Enet-zero greenhouse gas emissions\u003C\/a\u003E by around 2050.\u003C\/p\u003E\u003Cp\u003ENet zero is the point at which the amount of greenhouse gases released into the atmosphere is balanced by greenhouse gases removed, either through natural sources like forests or technologies such as carbon capture and storage.\u003C\/p\u003E\u003Cp\u003EThe \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/\u0022\u003EScience Based Targets initiative\u003C\/a\u003E, developed alongside the Paris Agreement in 2015, provides a framework to help companies align their efforts with the 1.5 C goal.\u003C\/p\u003E\u003Ch2\u003ESBTi Commitments Have Grown Quickly\u003C\/h2\u003E\u003Cp\u003ETo \u003Ca href=\u0022https:\/\/docs.sbtiservices.com\/resources\/ProcedureforValidationofTargets.pdf\u0022\u003Ejoin the initiative\u003C\/a\u003E, companies begin by signing a letter of commitment to set near-term (2030) and long-term (2050) targets for reducing their emissions. Companies have 24 months to develop targets that adhere to SBTi guidelines. If the targets are validated and approved by SBTi, the company announces its targets publicly. The targets must be revalidated every five years, or they expire.\u003C\/p\u003E\u003Cp\u003EThe number of global companies committing to and setting targets with SBTi has grown rapidly in recent years.\u003C\/p\u003E\u003Cp\u003EBy the end of 2023, 7,929 companies representing 39% of global market capitalization had committed to set targets, and 4,205 had targets already validated by SBTi. By November 2024, that number had grown to 6,614.\u003C\/p\u003E\u003Cp\u003EThis impressive participation is particularly significant given SBTi\u2019s high expectations. SBTi requires near-term targets to be set so \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/resources\/files\/SBTi-Corporate-Manual.pdf\u0022\u003Ecompanies reduce emissions by at least 42% by 2030\u003C\/a\u003E from 2020 levels.\u003C\/p\u003E\u003Ch2\u003EWhy Some Companies Have Pulled Back\u003C\/h2\u003E\u003Cp\u003ESo, why are companies like, Walmart, Microsoft and Amazon scaling back their commitments with SBTi?\u003C\/p\u003E\u003Cp\u003EWhile some people attribute these moves to \u003Ca href=\u0022https:\/\/www.spglobal.com\/marketintelligence\/en\/news-insights\/latest-news-headlines\/texas-lawmakers-houston-controller-say-anti-esg-law-is-government-overreach-83371504\u0022\u003Epolitical pressure from fossil fuel supporters\u003C\/a\u003E, a closer look at data since 2013 reveals a more complex set of factors that may better explain their actions.\u003C\/p\u003E\u003Cp\u003EWe found that, over the past decade, 695 companies either withdrew near- or long-term commitments or had a commitment that expired and was terminated by SBTi. These actions were concentrated in two distinct periods.\u003C\/p\u003E\u003Cp\u003EThe first period followed SBTi\u2019s decision in April 2019 to \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/resources\/legacy\/2019\/03\/SBTi-criteria.pdf\u0022\u003Eupdate its criteria\u003C\/a\u003E, including tightening the minimum target from under 2 C to either \u201cwell below 2 C\u201d or 1.5 C. We believe several companies were unprepared to meet the new requirements. Among the 500 companies that had either committed to or set a target by the end of 2018, 94 (18.8%) terminated their initial commitments after the criteria changed.\u003C\/p\u003E\u003Cp\u003EThe second period was after January 2023, when \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/news\/statement-on-the-end-of-the-commitment-compliance-policy-grace-period\u0022\u003ESBTi introduced a new compliance policy\u003C\/a\u003E and began removing commitments that had expired. In this period, 531 commitments were terminated \u2013 497 of them because the commitment expired, and 16 because the company withdrew.\u003C\/p\u003E\u003Cp\u003EIt\u2019s important to recognize that SBTi strategically raised the bar to encourage companies to accelerate their progress in addressing climate change.\u003C\/p\u003E\u003Ch2\u003EReasons Some Companies Have Struggled\u003C\/h2\u003E\u003Cp\u003EIn a report in March 2024, \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/resources\/files\/SBTi-Business-Ambition-final-report.pdf\u0022\u003ESBTi provided a candid look\u003C\/a\u003E at companies\u2019 climate commitments from 2019 to 2021 and, importantly, where they struggled.\u003C\/p\u003E\u003Cp\u003EApproximately half of the companies that responded to its survey identified the complexity of addressing \u003Ca href=\u0022https:\/\/www.epa.gov\/climateleadership\/scope-3-inventory-guidance\u0022\u003EScope 3 emissions\u003C\/a\u003E \u2013 emissions from a company\u2019s supply chain and use of its products \u2013 as a primary obstacle to setting net-zero targets. The \u003Ca href=\u0022https:\/\/theconversation.com\/esg-investing-has-a-blind-spot-that-puts-the-35-trillion-industrys-sustainability-promises-in-doubt-supply-chains-170199\u0022\u003Esupply chain is often considered a blind spot\u003C\/a\u003E for measuring environmental impact and is difficult for companies to control.\u003C\/p\u003E\u003Cp\u003EOn the day the report was released, SBTi removed the long-term commitments of 239 companies. About 60% of those companies had near-term targets that remained.\u003C\/p\u003E\u003Cp\u003EThis helps explain the news around companies such as Walmart, Microsoft and Amazon.\u003C\/p\u003E\u003Cp\u003EWalmart\u2019s and Microsoft\u2019s long-term net-zero commitments were terminated, though both companies still have valid near-term targets with SBTi.\u003C\/p\u003E\u003Cp\u003EMoreover, both reaffirm their environmental commitments in their annual reports. Walmart is currently \u003Ca href=\u0022https:\/\/sustainabilitymag.com\/supply-chain-sustainability\/how-walmart-is-successfully-driving-scope-3-decarbonisation\u0022\u003Efinalizing its Scope 3 emissions analysis\u003C\/a\u003E to inform future strategy development, and \u003Ca href=\u0022https:\/\/blogs.microsoft.com\/blog\/2020\/01\/16\/microsoft-will-be-carbon-negative-by-2030\/\u0022\u003EMicrosoft is investing in carbon removal\u003C\/a\u003E technologies to become carbon-negative by 2030.\u003C\/p\u003E\u003Cp\u003EAmazon presents a more challenging case. The company may have faced difficulty meeting SBTi\u2019s stringent mandate, particularly around supply chain emissions. Amazon has said it is \u003Ca href=\u0022https:\/\/www.aboutamazon.com\/news\/sustainability\/amazons-approach-to-setting-science-based-targets\u0022\u003Estill committed to reaching net-zero emissions\u003C\/a\u003E and plans to explore setting targets with other organizations.\u003C\/p\u003E\u003Ch2\u003EMany Companies are on Track\u003C\/h2\u003E\u003Cp\u003EOur analysis of \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/reports\/sbti-monitoring-report-2022\u0022\u003ESBTi\u2019s progress data\u003C\/a\u003E, which includes all companies that had set a target by 2022 for which SBTi has emissions data, reveals that companies are cutting their emissions by a median annual rate of 5.4%.\u003C\/p\u003E\u003Cp\u003ELooking just at direct emissions from companies\u2019 operations (Scope 1) and their purchased electricity (Scope 2), companies did even better. The median annual emissions decrease was 7.25% for companies with both Scope 1 and Scope 2 targets.\u003C\/p\u003E\u003Cp\u003EScope 2 emissions are the low-hanging fruit and frequently align with cost-saving measures like improving energy efficiency.\u003C\/p\u003E\u003Cp\u003EScope 3 emissions, those generated by companies\u2019 suppliers and by consumer use of their products, are the biggest challenge. Companies with a separate Scope 3 target only reduced those emissions by a median annual rate of about 3%.\u003C\/p\u003E\u003Cp\u003EIn 2024, SBTi announced \u003Ca href=\u0022https:\/\/sciencebasedtargets.org\/news\/statement-from-the-sbti-board-of-trustees-on-use-of-environmental-attribute-certificates-including-but-not-limited-to-voluntary-carbon-markets-for-abatement-purposes-limited-to-scope-3\u0022\u003Eplans to revise its Net-Zero Standard\u003C\/a\u003E and allow companies to use carbon offsets to meet their Scope 3 emissions targets, \u003Ca href=\u0022https:\/\/www.esgdive.com\/news\/sbti-walks-back-carbon-offset-scope-3policy-changes-after-staff-backlash\/713343\/#:%7E:text=The%20move%20was%20initially%20met,clarifying%20statement%20the%20next%20day.\u0022\u003Edrawing intense criticism\u003C\/a\u003E. Carbon offsets allow companies to \u003Ca href=\u0022https:\/\/theconversation.com\/companies-are-buying-up-cheap-carbon-offsets-data-suggest-its-more-about-greenwashing-than-helping-the-climate-238973\u0022\u003Epay projects to reduce emissions on their behalf\u003C\/a\u003E, such as by planting trees or managing forests.\u003C\/p\u003E\u003Cp\u003ESBTi\u2019s challenge lies in finding a balance that maintains the integrity of its standards while encouraging broader participation, especially from high-impact industries.\u003C\/p\u003E\u003Ch2\u003EOther Ways Companies are Reducing Emissions\u003C\/h2\u003E\u003Cp\u003EWhile setting and achieving SBTi targets signals a strong commitment to combating climate change, many companies are setting emissions goals and working toward them without joining SBTi.\u003C\/p\u003E\u003Cp\u003EAn example is the \u003Ca href=\u0022https:\/\/www.drawdowngabusiness.org\/\u0022\u003EDrawdown Georgia Business Compact\u003C\/a\u003E. It was created to accelerate the adoption of \u003Ca href=\u0022https:\/\/www.drawdownga.org\/drawdown-georgia-research\/\u0022\u003E20 technology- and market-ready solutions\u003C\/a\u003E and includes nearly 70 companies, from multinationals headquartered in Georgia like Delta and UPS to small- and medium-size enterprises operating in the state.\u003C\/p\u003E\u003Cp\u003EThrough the compact, companies are advancing initiatives with local economic benefits. For example, they are exploring ways to maximize Georgia forests\u2019 ability to remove carbon and discussing effective ways to deploy \u003Ca href=\u0022https:\/\/www.drawdowngabusiness.org\/news-and-insights\/fueling-the-future-georgia-tech-and-drawdown-georgia-business-compact-convene-experts-to-drive-sustainable-aviation-fuel-in-the-southeast\u0022\u003Esustainable aviation fuels\u003C\/a\u003E.\u003C\/p\u003E\u003Cp\u003EThe road to net-zero emissions will be bumpy. Yet the rapid growth of global corporate commitments, as well as action by a wider range of companies at the regional level, suggests corporate efforts are nevertheless moving forward.\u003C!-- Below is The Conversation\u0027s page counter tag. Please DO NOT REMOVE. --\u003E\u003Cimg style=\u0022border-color:!important;border-style:none;box-shadow:none !important;margin:0 !important;max-height:1px !important;max-width:1px !important;min-height:1px !important;min-width:1px !important;opacity:0 !important;outline:none !important;padding:0 !important;\u0022 src=\u0022https:\/\/counter.theconversation.com\/content\/239487\/count.gif?distributor=republish-lightbox-basic\u0022 alt=\u0022The Conversation\u0022 width=\u00221\u0022 height=\u00221\u0022 referrerpolicy=\u0022no-referrer-when-downgrade\u0022\u003E\u003C!-- End of code. If you don\u0027t see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https:\/\/theconversation.com\/republishing-guidelines --\u003E\u003C\/p\u003E\u003Cp\u003E\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u003Cem\u003EThis article is republished from \u003C\/em\u003E\u003Ca href=\u0022https:\/\/theconversation.com\u0022\u003E\u003Cem\u003EThe Conversation\u003C\/em\u003E\u003C\/a\u003E\u003Cem\u003E under a Creative Commons license. Read the \u003C\/em\u003E\u003Ca href=\u0022https:\/\/theconversation.com\/companies-are-still-committing-to-net-zero-emissions-even-if-its-a-bumpy-road-heres-what-the-data-show-239487\u0022\u003E\u003Cem\u003Eoriginal article\u003C\/em\u003E\u003C\/a\u003E\u003Cem\u003E.\u003C\/em\u003E\u003C\/p\u003E\u003C\/div\u003E","summary":"","format":"full_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EGeorgia Tech experts study the history of SBTi pledges to understand these commitments and what can undermine them. They believe there is more to the story of these pullbacks than meets the eye.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"Georgia Tech experts study the history of SBTi pledges to understand these commitments and what can undermine them. They believe there is more to the story of these pullbacks than meets the eye."}],"uid":"27469","created_gmt":"2024-12-04 17:17:39","changed_gmt":"2026-03-19 13:15:14","author":"Kristen Bailey","boilerplate_text":"","field_publication":"","field_article_url":"","location":"Atlanta, GA","dateline":{"date":"2024-11-20T00:00:00-05:00","iso_date":"2024-11-20T00:00:00-05:00","tz":"America\/New_York"},"extras":[],"hg_media":{"675773":{"id":"675773","type":"image","title":" Companies are cutting emissions fastest from energy use.","body":"\u003Cdiv\u003E\u003Cp\u003ECompanies are cutting emissions fastest from energy use. Falling solar prices help. \u003Ca href=\u0022https:\/\/www.gettyimages.com\/detail\/news-photo\/photovoltaic-panels-installed-on-the-roofs-of-enterprises-news-photo\/2170118102\u0022\u003ECFOTO\/Future Publishing via Getty Images\u003C\/a\u003E\u003C\/p\u003E\u003C\/div\u003E","created":"1733333134","gmt_created":"2024-12-04 17:25:34","changed":"1733333134","gmt_changed":"2024-12-04 17:25:34","alt":" Companies are cutting emissions fastest from energy use. Falling solar prices help. CFOTO\/Future Publishing via Getty Images","file":{"fid":"259438","name":"file-20241120-19-qf29e9.jpg","image_path":"\/sites\/default\/files\/2024\/12\/04\/file-20241120-19-qf29e9.jpg","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/2024\/12\/04\/file-20241120-19-qf29e9.jpg","mime":"image\/jpeg","size":235122,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/2024\/12\/04\/file-20241120-19-qf29e9.jpg?itok=StiQpiEs"}}},"media_ids":["675773"],"related_links":[{"url":"https:\/\/theconversation.com\/companies-are-still-committing-to-net-zero-emissions-even-if-its-a-bumpy-road-heres-what-the-data-show-239487","title":"Read This Story on The Conversation"}],"groups":[{"id":"658168","name":"Experts"},{"id":"1316","name":"Green Buzz"},{"id":"1214","name":"News Room"},{"id":"1188","name":"Research Horizons"},{"id":"1274","name":"Scheller College of Business"}],"categories":[],"keywords":[{"id":"187915","name":"go-researchnews"}],"core_research_areas":[],"news_room_topics":[{"id":"71911","name":"Earth and Environment"}],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Ch5\u003EAuthors:\u003C\/h5\u003E\u003Cp\u003E\u003Cstrong\u003EL. Beril Toktay\u0026nbsp;\u003C\/strong\u003E\u003Cbr\u003EProfessor of Operations Management, Georgia Institute of Technology\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u003Cstrong\u003EAbhinav Shubham\u0026nbsp;\u003C\/strong\u003E\u003Cbr\u003EPh.D. Candidate in Operations Management, Georgia Institute of Technology\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u003Cstrong\u003EDonghyun (Daniel) Choi\u0026nbsp;\u003C\/strong\u003E\u003Cbr\u003EPh.D. Candidate in Operations Management, Georgia Institute of Technology\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u003Cstrong\u003EManpreet S. Hora\u0026nbsp;\u003C\/strong\u003E\u003Cbr\u003EProfessor of Operations Management, Georgia Institute of Technology\u003C\/p\u003E\u003Ch5\u003E\u0026nbsp;\u003C\/h5\u003E\u003Ch5\u003EMedia Contact:\u003C\/h5\u003E\u003Cp\u003EShelley Wunder-Smith\u003Cbr\u003E\u003Ca href=\u0022mailto:shelley.wunder-smith@research.gatech.edu\u0022\u003Eshelley.wunder-smith@research.gatech.edu\u003C\/a\u003E\u003C\/p\u003E","format":"limited_html"}],"email":[],"slides":[],"orientation":[],"userdata":""}}}