Corporate Australia’s net-zero talk not matched by targets

Corporate Australia’s ambitions to reach net-zero are not being matched by concrete targets, with current commitments by ASX200 companies unlikely to contain emissions growth beyond the targets set in the Paris Agreement.

While the goal to limit warming to 1.5 degrees by 2050 has been enthusiastically embraced by the country’s largest listed companies, the Australian Council of Superannuation Investors (ACSI) said there was still a lack of concrete short and medium term emissions reduction targets on the table.

The lack of these targets, according to ACSI’s analysis, will lead to a 36 per cent overspend of the ASX200’s “carbon budget” for the period between 2021 and 2050.

“While we welcome the growing number of net-zero ambitions from the ASX200, ambitions must be made more credible by accounting for all emissions and implementing measurable short and medium-term reductions targets,” said ACSI chief executive Louise Davidson.

“We can’t wait for everyone just to make a big change in 2049. It has to start happening a lot earlier than that.”

ACSI’s analysis of 187 companies found that while most of the companies that have set zero targets for scope 1 and 2 emissions are aligning their targets to a trajectory of 1.5 degrees, only 9 per cent of companies that cover scope 1, 2 and 3 emissions were aligned to a 1.5 degree pathway. Scope 3 emissions are those that track indirect and supply chains emissions.

Just under half of ASX200 companies have not set any absolute emissions reduction targets, according to ACSI.

“The Paris agreement actually says [to limit warming to] well below 2 degrees but preferably 1.5 degrees,” said Davidson. “If you can look at the latest Inter-Governmental Panel on Climate Change (IPCC) report, and also just the extreme weather that we’re already seeing at 1.1 degrees above pre-industrial levels, you can see that it’s going to be very, very challenging if we don’t manage to keep to 1.5 degrees.”

Davidson said it was important to acknowledge a lot of progress has been made in the past five years, but setting targets aimed at reducing emissions at well below 2 degrees was now considered an entry point, with 1.5 degree-aligned targets being called for.