Only 20% of Companies Globally Are Meeting Their Carbon Reduction Targets: Report

Engie Impact has released its “2024 Net Zero Report” which identifies common roadblocks to decarbonisation and explores some troubling findings, including the tendency for many organisations to approach decarbonisation as a limited, narrow initiative instead of the transformational, whole-business approach it needs to be.

This fourth instalment of the annual report, based on surveys of more than 500 senior decision-makers from large global organisations, provides a year-over-year analysis of the progress companies are making in their decarbonisation efforts — identifying trends that are both encouraging and concerning.

The share of companies rating their sustainability programmes as either “extremely” or “considerably” successful has significantly increased from a combined total of 28% in 2020 to 68% today. Additionally, half of the companies (52%) are already making fundamental changes to their business model to achieve long-term decarbonisation commitments.

However, only 20% say they are “meeting or exceeding” their ambitious goals, acknowledging the extent of work that still needs to be done. A majority of companies also expect future “significant change” or “complete transformation” of some fundamental business practices — including technology and data, sourcing and supply chain, employee skillsets, and even the products and services they offer — to reach their long-term decarbonisation commitments.

“The signals from our 2024 Net Zero Report research are encouraging, with corporate leaders indicating they are open to the necessary transformational change,” said Mathias Lelievre, CEO of Engie Impact. ”There are signs of progress, but there is still significant work to be done. The necessary acceleration is not there yet. We need to do it faster. It needs to happen today. It’s time for businesses and governments to prioritise doing the executional work.”

The research revealed five core roadblocks inhibiting corporate decarbonisation progress:

  • Multiple business priorities and a lack of executive focus.
  • Internal governance bottlenecks that slow decision-making and execution.
  • Budget constraints that limit the speed of execution.
  • Limited data and technology to measure and report progress.
  • Lack of internal skillsets to execute change at pace and scale.

“These roadblocks are cross-functional and cannot be solved by one group or team alone,” said Lelievre. “Taking a holistic business approach addresses all of these roadblocks — turning inhibitors into benefits and creating a pathway to success.”

Companies that approach decarbonisation from a business transformation perspective will be able to address all those main barriers — providing clarity of focus, effective governance, smart financing, alignment on data and measurement, and the right implementation delivery models.

“Most organisations have clear decarbonisation goals for 2050 and many organisations have interim targets to hit by the end of this decade.

For their decarbonisation ambitions to remain credible in the eyes of investors, employees, customers, and other stakeholder groups, these organisations find themselves under pressure to deliver measurable progress quickly. They cannot wait to begin to make headway. Now is the time to accelerate decarbonisation efforts together,” concludes Lelievre.