Companies are reducing emissions, but too slowly and not enough
92% of companies surveyed have made a public climate change commitment. On average, they plan to reduce emissions with 33%, but so far they have reduced emissions with 19%. The world needs a 45% reduction by 2030 to keep 1.5°C on track. Most commitments fall short – only 27% plan to reduce emissions with 45% or more and only 38% have a commitment by 2030.
Companies’ climate investments are turning into financial value. Four in ten have achieved higher than expected financial value. The trade-off between delivering on planetary goals or meeting business objectives is often a false choice. A holistic approach to sustainability that includes the financial, employee, and customer benefits, tends to deliver more value to the planet.
Organizations taking fewer actions struggle more with execution, while organizations leading on action need to improve coordination and internal collaboration. Key opportunities to make significant headway on climate change include broader partnerships and investing in talent.
Six in ten companies plan to spend more money next year to address climate change compared to this year, with a quarter planning to spend significantly more. Value creation is a key consideration, with almost all (99%) of organizations considering more than one type of value when evaluating an initiative.
Only 29% of the respondents have committed to carbon negative and 15% have committed to net zero. Most companies are falling short of a 45% reduction by 2030 to keep 1.5°C on track (as mapped out in the Paris Agreement): 38% have a commitment by 2030 and only 27% plan to reduce emissions 45% or more (at any point).
A Value-Led Sustainability approach is driving financial impacts
Companies’ climate change investments are delivering more value than expected across multiple dimensions. This is despite concerns climate change initiatives will negatively impact financial performance (37%) or reduce their ability to compete in the market in the near-term (19%). On average, respondents say 2.8 times as many of their organization’s climate initiatives will have a positive financial impact than a negative one (39% vs 14%).
Companies are 0.5 times more likely to prioritize financial value than planetary value as the number one consideration when evaluating an initiative. Considering the impact of climate initiatives across multiple types of value can benefit businesses, society and the planet. Long-term sustainability planning makes it easier for companies to stay the course or find new opportunities to create value.