Twenty-three of Australia’s largest companies have their emissions under long term net zero targets which are aligned with the 1.5°C goal of the Paris Agreement, according to a Climateworks Centre study of ASX200 company climate commitments.
This represents a 44% increase between March and November 2022, with one company found to have an aligned long term net zero target supported with a 1.5°C-aligned medium- term target.
The Net Zero Momentum Tracker study assessed the publicly available emissions reduction targets from the 187 ASX200 companies with operations in Australia, against a 1.5°C decarbonisation pathway compatible with global science.
‘We also assessed if long term net zero targets for scope 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.
‘These are some of the best practice principles fast becoming the global standard. What’s next is companies achieving their targets – which is the real test, so there is still everything to play for.’
Ms Malos said the analysis of March 2022 company data showed 16 major Australian companies with 1.5°C-aligned long term targets.
‘By November, there were 23 companies with comprehensive targets covering all emissions which, if achieved, would help limit temperature rise to 1.5°C,’ she said.
‘One of these companies, Qantas, has an interim target that is also set on a 1.5°C-trajectory.’
The analysis for all 187 companies is contained in an interactive online table.
The 23 companies shown to have aligned climate targets came from a range of sectors and include The a2 Milk Company, Aurizon Holdings, BHP Group, Blackmores, Block Inc, Brambles, CIMIC Group, Cochlear, Downer EDI, Evolution Mining, Fortescue Metals Group, Graincorp, Lifestyle Communities, Lendlease Group, Northern Star Resources, Orica, Origin Energy, Qantas, SEEK, South32, Transurban Group, Tyro Payments, and Worley.
Of the rest, 83 companies had net zero targets for some of their emissions but not all, and 81 companies had no disclosed net zero targets.
Seventy-eight companies, 42% of those studied, had a 1.5°C-aligned net zero target for their operational scope 1 and 2 emissions. Twenty-five or 13% 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.
‘Bodies such as the International Sustainability Standards Board (ISSB) are also preparing to set clear standards for mandated disclosures for scope 3,’ he said.
‘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, ASX200 emission cuts won’t stack up to the level demanded by science and investors.’
For example, Mr Wainwright said most of the targets for decarbonisation efforts in high emitting sectors – utilities, metals and mining and oil, gas and consumable fuels – would take effect in the medium and long-term, which meant they would remain the top emitting sectors until 2035.
After this date, lower emitting sectors are forecast to become an area of growing importance.
‘Most of the 68 ASX200 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,’ he said.
‘There remains enormous opportunity for increased ambition across the ASX200, 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 Australia is now a net zero operating environment.’
Climateworks Centre is an independent not for profit operating within the Monash Sustainable Development Institute at Monash University. The Net Zero Momentum Tracker was established in 2019 to assess the publicly available climate commitments of Australia’s highest emitting sectors and organisations, including the largest companies by market capitalisation.
Climateworks’ best practice principles for corporate 1.5 targets were published in 2021.
The report ‘1.5°C climate goal: How does the ASX200 stack up in 2022’ assesses company commitments against Climateworks’ Decarbonisation Futures ‘All-in’ scenario, which is compatible with limiting global warming to 1.5°C, and is based on analysis of March 2022 company data.