The emission reduction targets of G7 firms are aligned with 2.7°C of global warming, potentially undermining November’s COP27 talks.
That is according to a report from non-profit CDP, whose latest analysis shows that no G7 country has a corporate sector that is likely to decarbonise fast enough to meet the 1.5°C goal of the Paris Agreement.
Companies in Germany and Italy have the most ambitious emissions reduction targets in the G7, and are collectively aligned with 2.2°C of warming above pre-industrial levels. They are followed by firms in France, the UK and US, aligned with 2.3°C, 2.6°C and 2.8°C of warming respectively. Canada fares worst, with targets aligned with 3.1°C of warming. The analysis could undermine G7 countries’ demands as they prepare for COP27.
The temperature ratings in the study reflect corporate ambition, including all emissions in company value chains rather than national climate policies or Nationally Determined Contributions.
European companies outperform North American and Asian peers across all industries, with around 80% of corporate emissions in Europe covered by a valid 2°C target or better. Its power generation sector is ahead of all sectors globally on 1.9°C of warming, compared to 2.1°C for North America and 3°C for Asia.
Overall, Europe’s corporate sector improved from 2.7°C of warming in 2020 to 2.4°C in 2022, with an 85% rise in companies setting science-based targets during 2021. The high temperature ratings seen in North America are largely the result of companies lacking targets, rather than targets that lack ambition.
“High-impact companies, and their investors and lenders, must immediately set and honour targets with credible transition plans to allow us to meet this goal,” said Laurent Babikian, global director for capital markets at CDP.
