Companies feel internal and external pressure to set net-zero target

The vast majority (88%) of companies feel internal and external pressure to set a net-zero target as a part of their climate change efforts, according to a Nasdaq survey report, 2023 Global Net Zero Pulse, that polled ESG and sustainability professionals across public and private companies globally. This pressure comes from across the board, the report found, from investors (26%) and customers (20%) to employees (15%) and the board (12%). Nearly 25% of companies have set a net-zero target and another 25% expect to within the next two years. According to the report, 35% of companies have made no claims on net zero, while 18% expect to make a verified net-zero commitment within the next two years. The survey said 12% have made a net-zero claim (verified by the Science Based Target Initiative), with 12% unverified by the initiative). A further 8% had made a carbon-neutral claim, and 7% expect to make an unverified net-zero commitment within the next two years. When it comes to carbon credits, the report found that education is one of the biggest hurdles that companies face in developing a carbon-credit strategy. It also found that companies do not distinguish strong differences between nature-based credits and engineered credits. “The lack of distinction between these two carbon-removal pathways suggests a higher hurdle for carbon dioxide removal (CDR) startups when differentiating their carbon removal credits to potential corporate buyers,” the report states. The report provides some key takeaways for building a net-zero future: Conduct greenhouse gas (GHG) footprinting exercise to help inform internal carbon budget: Most survey respondents do not believe carbon credits are applicable to their companies, and many are unsure of their internal carbon price or acknowledge that they do not have one. Engage with key customers and investors prior to establishing a net-zero strategy: Most survey respondents indicate that their companies do not have any climate commitment. However, within the next two years, many companies expect to make net-zero commitments. Seek additional education on CDR: Education gaps and further guidance from rule-making bodies are significant barriers to the growth of CDR within the voluntary carbon market (VCM). Through additional education, companies can credibly establish decarbonisation strategies by increasing future CDR offtake and responsibly utilising traditional carbon credits. Embrace key learnings from early CDR adopters: CDR is a multidisciplinary field of innovation requiring moderate to advanced knowledge of climate science, technology, biogeochemical cycles, energy systems, project finance, market infrastructure, carbon stocks, and carbon accounting. Survey data indicates that there is opportunity to advance net-zero ambition and strengthen the VCM through education and guidance from rule-making bodies. Finally, the survey findings confirm that many companies believe they are only able to mitigate or reduce up to 20% of their emissions without carbon removal credits in 2023. “Therefore, only a small percentage of a company’s emission profile is considered ‘low hanging fruit’ that does not require carbon removal credits. However, this view may shift considerably by the end of the decade, as most respondents believe more than half of their companies’ emissions can be mitigated or reduced without carbon removal credits. While this may be true for many of the survey respondents in easy-to-abate sectors, like informational technology, companies within hard-to-abate sectors, like energy, envision greater challenges,” the report states.

Companies feel internal and external pressure to set net-zero target

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