Since the expansion of client reporting and higher awareness of global emissions impacts, targets have been the main indicator of intent in relation to positive action on emissions reduction. They have had a patchy track record so far despite the headlines.
Working with large global firms over many years we have seen a range of targets being introduced, some with excellent preparation and a framework and/or plan to reduce emissions. In the least desirable examples, targets have been announced by CEOs at large global conferences that have been entirely unsupported by any plan or sometimes accurate baseline reporting to support the stated target ambition. This has grown less common, but even British Prime Minister, Boris Johnson announced new national targets at COP21 that seemed to have little basis in feasibility analysis, so it is not a problem confined to the corporate world alone.
The more “wild west” days of targets have receded, but there is still an underlying disconnect between targets and the available reporting of companies. Progress to targets, honesty on in year misses and remedial action, are still a minority public disclosure. The data we have reviewed suggests that targets, as so often in politics, are not actually targets, but aspirations.
Since COP21 SBTi has become the de facto standard for Net Zero targets and their approval. (Other target frameworks are available). Indeed, having a Net Zero target, SBTi claim over 10,000 companies have been approved by them, has increasingly become a must have corporate badge of honour.
In reviewing major companies with SBTi targets and their public disclosures on emissions outputs and progress to targets, we find a worrying trend. XX% of a sample of over 2,000 companies reviewed by the Ada research team, found that there was no accessible corporate reporting, let alone progress to near term targets with deadlines in the next few years.
The absence of corporate reporting, that is readily available for consumers and investors to evaluate corporate achievement in climate goals, is a concern. At one level it raises questions about transparency and commitment. At another level, it does not meet the threshold for regulators in ensuring that claims on climate goals must be supported by easily accessible and clear data. If a trained carbon emissions data analyst cannot find a report, there is little chance of an interested individual finding it.
The increased attention paid to greenhushing in the last few years, is another indicator that companies are unsure, unwilling or unable to accurately report emissions impacts. That does not prevent them from having a target, as long as they have a baseline and can meet target approval criteria.
With or without a target, the best reported companies show their year on year emissions reporting, some include several prior years as well. This gives a very good indicator of emissions impacts from a company in which a person is invested or is a consumer, especially when related to revenues and/or value. The transparency on numbers is positive, but more when it achieves the highest level of data score in the PCAF derived ranking system that Ada uses.
A target is not an end in itself, progress on reduction of emissions, with or without a target is the key determinant of action. The setting of target alone will not guarantee delivery of positive outcome.
