During Climate Week 2019, EcoAct hosted an event discussing its annual report of global corporations’ progress towards a net zero emissions world.
The discussion was focused on the DOW 30, a relatively new focus of the report, that has been released each year for nearly a decade. The goal of the report is to inspire change, encouraging organizations to be transparent in managing their environmental impacts by looking exclusively at publicly available information.
The report identified and explored five trends within the sustainability practices of DOW 30 corporations: net zero, climate disclosure, science-based targets and emission measurement and reporting, and renewables. Below is a brief exploration of each trend.
- When it comes to the goal of net zero carbon emissions, the DOW 30 is a mixed bag. While 100% of companies measure and/or report their carbon emissions and 77% have set carbon reduction targets, only 10% of corporations have committed to carbon neutrality by 2050. 57% of companies who have set carbon reduction targets are on track to meet those targets, and just 7% are already carbon-neutral.
- Many companies are rapidly adopting Task Force on Climate-related Financial Disclosures (TCFD) guidelines, up from 3% in 2018 to 23% in 2019. While this is a large jump, the DOW 30 has the lowest percentage of companies aligning with the TCFD’s recommendations compared to European indices. With 100% of companies aligned with the TCFD’s recommendations, Electricity, Gas and Oil is the most engaged sector.
- In an effort to make a bold commitment to sustainability, some corporations are setting science-based targets, or goals meant to keep the world at or below the 2°C warming benchmark. While the number of DOW 30 organizations setting carbon reduction targets has stayed steady at 77% since 2018, 37% of companies are setting science-based targets and 13% have committed to setting one in the next two years.
- The organizations in the DOW 30 all report their Scope 1 (direct) and 2 (indirect) emissions, and 80% include their Scope 3 (other indirect) emissions. Scope 3 emissions often make up the bulk of an organization’s carbon footprint, and the number of companies reporting their Scope 3 emissions has not increased since last year.
- DOW 30 companies shine when it comes to renewables — 97% used renewable energy in 2019, an increase from 87% in 2018. This is likely in part due to the decreasing cost of renewables, as well as tax incentives and subsidies. Additionally, 73% of organizations are producing renewable energy on-site, an economical solution to a carbon-costly resource.
Overall, while some leaders are pulling ahead, other organizations are not taking the steps required of them to transition to a low-carbon economy.
EcoAct concluded that the DOW 30 are becoming more ambitious in their sustainability commitments, as reflected by an increasing number of organizations measuring emissions, using renewable energy, and reporting climate-related risks in line with the TCFD’s recommendations. External shareholders are also pushing to improve commitments to climate action. However, EcoAct reports a wide range of scores of transparent sustainability reporting, from 86% all the way down to 28%, with an average score of 54% for the entire index. Overall, while some leaders are pulling ahead, other organizations are not taking the steps required of them to transition to a low-carbon economy.
Read EcoAct’s full report: The Sustainability Reporting Performance of the DOW 30.