Over 40% of major companies, cities and regions lack emission reduction targets, shows new report

As the climate crisis accelerates, the Net Zero Stocktake 2024 identifies a commitment gap across cities, states and regions, which is holding back the necessary economy-wide transition.

The Net Zero Tracker’s annual assessment of the intent and integrity of global climate commitments, shows only a modest increase in net zero targets set by subnational governments (states and regions, and cities) in the past year.

Thomas Hale, Professor of Public Policy at Oxford University’s Blavatnik School of Government, who co-led the report, said:

'Net zero leaders may now be grappling with the hard work of implementation, but they are in a far better place than those who, remarkably, have yet to position themselves for a successful transition. Major companies that have yet to set a net zero target are a time bomb for their employees and investors and a mounting financial risk for the economy overall—as well as the planet we all live on.'

Dr Steve Smith, Executive Director at Oxford Net Zero, said:

'It’s two years since the UN Secretary General launched a report into net zero pledges, saying “we must have zero tolerance for net-zero greenwashing.” And yet our findings show barely any improvements. Fewer than 5% of all the pledges by cities, regions and companies meet all our criteria for integrity. That number has risen by just 1% since last year. But there are a few bright spots of leadership around the world. Ambitious and honest action is possible. We point to examples in our report, with the hope that there will be many more in the near future.'

• 26% (185 of 706) of states and regions in the NZT database have net zero targets, collectively covering a population of 2.2 billion, up from 497 million in December 2020.  
• 23% (271 of 1186) of major cities have set net zero targets, which represents a total population of 793 million, up from 640 million in December 2020.
• Most city-level net zero targets are in ‘high income’ countries (178 of 271 city-level net zero targets). Only 11% of the cities in lower income countries have net zero targets (93 of 842).

The initial phases of the net zero journey largely centred on setting national targets and on aligning companies with the Paris Agreement; today net zero targets are mainstream at the country-level and are a corporate norm.

• Net zero targets set by nations and self-governing territories (including the European Union and Taiwan) represent at least 87% of global GHG emissions, 93% of global GDP and 88% of global population.
• Nearly 60% of the 1,977 publicly-listed companies that NZT tracks have set net zero targets. Weighted by revenue, 67% have set net zero targets. 

Some bright spots of progress can be seen in the subnational governments of 14 major-emitting nations. For example:

• In India, 14 of the 20 regions with a net zero target have a target year that is earlier than India’s national 2070 net zero target. These targets steer climate action on the ground and assure top-level ambition.
• In the United States, 18 states have set net zero targets, five of which have earlier net zero target years than the federal government’s 2050 target. In addition to the 18 states with net zero targets, nine states have emission reduction targets of 80% for 2050.
• In Mexico, which does not have a national-level net zero target, 11 of its 32 states have long-term climate targets, three of which are net zero targets. 

However, the report calls for all cities, states and regions to translate their wide-ranging authority to establish and enforce policies and regulations into clear net zero plans. 

Net zero target-setting integrity remains low - companies lead on target upgrades

The Stocktake finds an increasing number of robust non-state (regions, cities and company) net zero targets and implementation plans, but with persistent gaps - and slow progress in net zero target integrity across all non-state entity types over the last two years. 

The quality of the net zero commitments, measured against accepted integrity criteria, is only met by up to 5%, 4% and 3% of companies, cities and regions, respectively. However, the absolute number of companies that met all criteria increased by 62% compared with eighteen months ago.

The world’s largest alliance of 14,500 non-state and subnational entities, the Race to Zero campaign, led by the UN Climate Change High-Level Champions, was found to be a driver of net zero target-setting integrity. 

• The fraction of corporate and subnational net zero targets meeting the robustness criteria is considerably higher among Race to Zero members for states and regions, cities, and companies.
• All those cities that met all robustness criteria were found among Race to Zero members.

40% of non-state and subnational entities have opted out of addressing the climate challenge

Strikingly, more than 40% (1,700 / 3,870) of major non-state and subnational governments and companies are operating without any kind of emissions reduction target.

• The number of companies that do not have any emissions target reduced substantially from 734 last year to 495 — 40% of them are Chinese companies.
• Companies without emissions targets include BYD, Fox Corporation, Shimano, Hertz, Nintendo, and Berkshire Hathaway.
• Nearly half (48) of the world's largest 100 private companies have opted out of setting climate targets.