Net zero targets are for life, not just a corporate statement...

If evidence were needed that a net zero claim is for life and not just the corporate strategy document, then the news that the Science Based Targets initiative (SBTi) has de-listed more than 200 companies from its Business Ambition for 1.5degC campaign is it. With impending European legislation set to mandate emissions reporting as part of the CSR Directive, and the UK’s own ESOS initiative moving the lens to non-financial reporting for companies, there’s an emerging clear shift from flag waving net zero statements to the need to “prove-it”.

Faced with this, it would appear many companies are coming up short. And let’s not forget these companies were, arguably, the biggest advocates for action against climate change.

Indeed, in the SBTi’s final report on the Business Ambition campaign published in March (the initiative kicked off in 2019 and ended in January this year) it’s clear many of the 1045 companies who had signed up to the vision had found things a bit tougher than they’d expected. In the report, the participating companies were surveyed on the “barriers faced in setting net zero targets” and the top three responses were “Scope three is too much of a challenge”, “Too many unknowns in future technological developments” and “Lacking certainty that we can achieve the target”.

Picking up on the first point, let’s just have a quick recap on the emissions scopes. Many logistics companies will fall into the Scope Three emissions of their clients and it’s the lack of reporting in this area which is apparently causing the blue chips the trouble. Fleet operators will increasingly be asked to provide their carbon reporting to that effect, particularly if they are carrying out work for any of the companies who have signed up for the science-based reporting.

But, in order to present those fleet emissions up the supply chain, an organisation will in itself have to report on its own Scope 1 (own fleet and activity), Scope 2 (primarily the electric it uses) and Scope 3 emissions (emissions from its third party supplier base) and so it goes on, into a vast pyramid of emissions reporting which will eventually permeate every area of business.

Little wonder it’s causing brain ache at the big firms, and they are, apparently, starting to shy away from their, perhaps, rather bold net zero ambitions. Maybe the top-down approach of the big companies driving change through their supply chain, should be balanced with some incentives for those more focused on change through bottom-up?

In fairness, while this does have a strong whiff of “it’s all getting too difficult, let’s call the whole thing off” about it, we should remind ourselves the 239 companies who have had their SBTi status removed are the minority of the companies in the campaign and many of those 239 do have near-term emissions targets in place, just not the full fat net zero plan.

It does, however, underline the magnitude of the task all industry sectors face in shifting from a reliance on fossil fuels. It was easy to make those big net zero claims around the boardroom table, delivering on them is a different matter. Clearly some of the current industry turmoil (takeover negotiations, outsourcing/insourcing of fleet operations, financial difficulties of many smaller operators, political uncertainty) is in danger of bumping decarbonisation down the business priority list. Just at the time when corporations should be doubling-down on their decarbonisation actions, it seems there’s a weakening of resolve.

This must not be allowed to gather pace. The climate scientists continue to warn of record-breaking global temperatures and the drastic impact of climate change is becoming more apparent. The momentum to decarbonise must be maintained. Later this month, we’ll be teaming up with Motor Transport to announce the Decarbonisation Power Players in association with Optimize, celebrating those individuals demonstrating the leadership required to keep the sector moving along its decarbonisation pathway. The announcement of the rankings will take place at a special webinar on 30 April – more details to follow next week.