A recent Climateworks Centre study has revealed that 23 ASX 200 companies have brought their emissions under long-term net zero targets, aligning with the Paris Agreement.
This equates to a 44 per cent increase between March and November, with one company (Qantas) being found to have an aligned long-term net zero target supported by a 1.5°C-aligned medium-term target.
The Climateworks Centre Net Zero Momentum Tracker study assessed the publicly available emissions reduction targets against a 1.5°C decarbonisation pathway that is recognised by global science.
“We also assessed if long-term net zero targets for scopes 1 and 2, and scope 3 emissions were supported with aligned short and medium-term interim targets,” said Climateworks Centre’s Australia country lead Anna Malos.
“By November, there were 23 companies with comprehensive targets covering all emissions which, if achieved, would help limit temperature rise to 1.5 [degrees],” she added.
The 23 companies applauded for their net zero progress came from a range of sectors and included BHP Group, Blackmores, Brambles, Fortescue Metals Group, Origin Energy, Qantas, SEEK and South32 Ltd.
Moreover, the study found that 83 companies had net zero targets for some of their emissions but not all, while 81 companies had no disclosed net zero targets.
While 78 companies were found to have a 1.5°C-aligned net zero target for their operational scope 1 and 2 emissions, only 25 had a 1.5°C-aligned net zero target for their scope 3 emissions, which are associated with a company’s wider value chain.
“While fewer companies had targets for their indirect scope 3 emissions, these represent the larger share of emissions,” said Tom Wainwright, Climateworks Centre’s corporate system lead.
He noted that bodies such as the International Sustainability Standards Board (ISSB) are also preparing to set clear standards for mandated disclosures for scope 3.
“Despite the momentum we have found, unless more company targets are brought forward, extended to include scope 3, and supported with short and medium-term targets and actions, ASX 200 emission cuts won’t stack up to the level demanded by science and investors,” Mr Wainwright continued.
Mr Wainwright said most of the targets for decarbonisation efforts in high-emitting sectors would take effect in the medium and long term, which meant sectors such as mining and oil would remain chief emitters until 2035.
Looking forward, the Climateworks Centre forecasts lower-emitting sectors to become an area of growing importance after 2035.
“Most of the 68 ASX 200 companies assessed without any emission reduction commitments were in low-emitting sectors. Without action, emissions from sectors like communications, information technology, and hotels and restaurants were expected to increase as a proportion by 2050,” Mr Wainwright explained.
Ultimately, Mr Wainwright said there remained enormous opportunity for increased ambition across the ASX 200, particularly for those sectors where solutions are readily available today.
“All major companies should have a credible plan for addressing all their emissions, being mindful [that] Australia is now a net zero operating environment,” he concluded.
