Europe's largest firms set to miss net-zero targets

Almost one-third of Europe's largest companies have now set net-zero emissions targets, but far less are set to deliver on their ambitions.

That is according to a report published today by consultancy giant Accenture, which analysed data from more than 1,000 listed companies across Europe’s major stock indexes.

It found that 30% have now pledged to reach net-zero emissions by 2050, with UK firms most likely to have done so, on 37%, compared with 27% and 18% in Germany and France, respectively.

The average net-zero target year for European companies in the study is 2043, although many firms in the services sectors are aiming for around 2035.

However, the study also found that just 5% of companies with net-zero goals are set to hit their target dates for scope 1 and 2 emissions if progress continues at the current pace.

Companies that have achieved modest emissions reductions of 5% or less since 2010 can still reach net zero in their operations before mid-century, according to the researchers, but only if they double the pace of reductions by 2030, and triple it by 2040.

“Though the number of newly set targets is reassuring, it is still clear that organisations are not moving fast enough,” said Peter Lacy, Accenture’s chief responsibility officer.

“With COP26 just a few weeks away, businesses and governments across all parts of the world need to focus their efforts on concrete action that follows robust targets to meet the challenge our world faces to reach net zero by mid-century and hold global warming to 1.5°C.”

Over the last decade, companies with a net-zero goal reduced their emissions by 10% on average, according to the report, while those without targets saw their emissions increase.

The paper suggests specific solutions and “stepping stones to net zero” for certain sectors, including automotive, chemicals, construction, finance, retail and transportation.

However, it also explains how “radical acceleration” will be needed for five sectors – automotive, construction, manufacturing, oil and gas, and transportation and storage – if they are to reach net zero by 2050.

“Our findings show that it is possible, but only if European businesses act now,” said Jean-Marc Ollagnier, CEO of Accenture in Europe. “Solutions differ by industry and company, and all have different starting points, opportunities and challenges.

“In some industries, the required technologies are available and will need to be scaled at speed. In others, they will have to be invented. However, getting there will require all businesses to make reinvention the norm, driven by technological innovation, collaboration, new business models and supportive regulation.”