DAX companies’ long-term emission reduction plans insufficient to reach net-zero targets – consultancy
Clean Energy Wire
Sixty percent of the top 20 DAX companies – major German businesses trading on the Frankfurt Stock Exchange – have set themselves net-zero greenhouse gas emission targets, but only a minority has specified the long-term emission reduction plans to reach them, an annual report by climate consultancy EcoAct has found. The 2022 Corporate Climate Reporting Performance Report, which assesses how the largest international companies are addressing climate-related sustainability challenges, found that this year just one in five of the 20 largest DAX companies has set long-term emission goals. Only about a third of companies have plans to reduce their emissions along a 1.5 °C trajectory as established in the 2015 Paris Climate Agreement. “As Europe's largest economy, German companies play a crucial role in implementing climate protection measures,” EcoAct’s head of net-zero transformation Isabel Heeckt said. “Despite the phenomenal momentum of COP26, however, many of Germany's largest companies are still not doing enough or showing any initiative.”
Having a "net zero" target or launching a "climate neutral" product has increased in popularity exponentially in recent years, but claims can be difficult to verify and many times they don’t add up when checked carefully. The Intergovernmental Panel on Climate Change (IPCC) has said that “limiting warming to around 1.5°C requires global greenhouse gas emissions to peak before 2025 at the latest, and be reduced by 43 percent by 2030." Germany plans to become climate neutral by 2045.
The EcoAct report concludes that “large corporates are not keeping pace with the rising bar for best practice in corporate climate reporting and performance,” adding that only 35 percent of the largest DAX companies achieved Scope 1 (direct) and Scope 2 (indirect emissions from the use of electricity, heating and cooling that the company purchases and consumes for its operations) emissions reductions aligned to 1.5°C, which is below the international average. However, 90 percent of the top 20 DAX companies have committed to addressing Scope 1 and Scope 2 emissions in the short term, and 80 percent plan to target Scope 3 emissions – additional indirect emissions along the entire value chain.