Next week, I'll be in Dubai for COP28, the annual United Nations climate conference, along with some 70,000 other souls from across the globe. Among the big stories this year: a "global stocktake," U.N.-speak for an accounting by each of the 196 signatory countries to the 2015 Paris Agreement on how well they are doing to keep the worst of the climate crisis in check.
You probably don’t need to spring for a roundtrip ticket to a Middle East oil kingdom to know the answer.
Much as with countries, companies are significantly off-track.
The world is "woefully off track" on 41 of 42 indicators of climate progress — across power, buildings, industry transport, forests and land, food and agriculture, technological carbon removal and climate finance, according to State of Climate Action 2023, published last month by six environmental groups, including the Bezos Earth Fund, New Climate Institute and World Resources Institute. Another six indicators are “heading in the wrong direction entirely.”
And forget 1.5 degrees Celsius, the maximum hoped-for temperature rise stated in the Paris accord. We’re well on our way to nearly 3 degrees rise by the end of the century, according to a new United Nations report, a once-unthinkable level of warming expected to have devastating impacts on pretty much every aspect of life, globally.
What about corporates?
Meanwhile, while national delegations are taking stock of one another, I've been doing a "corporate stocktake." Are companies doing what needs to be done to confront the climate crisis?
Spoiler alert: Much as with countries, the world's companies are significantly off-track.
"Businesses are far, far ahead of where they were three, five or 10 years ago," Aron Cramer, president and CEO of the nonprofit consultancy BSR, told me. "And it's equally true that it’s not enough."
"The progress that's being made is undeniable," he continued. "The investment, the innovation, the commitment and, in most cases, good-faith efforts to make things happen — that is all substantially ahead of where we were. But we're not getting where we need to go."
Cramer’s concerns are buttressed by a spate of reports on corporate performance published in the past few weeks. A sampling:
Emissions are still rising. Publicly listed companies are likely to pump 12.4 gigatons of greenhouse gas emissions into the atmosphere this year, up 11 percent from 2022, according to MSCI. It found that at their current rate of emissions, these companies "would use up their share of the global carbon budget for keeping the rise in global temperatures below 1.5 degrees by April 2026" — three months sooner than MSCI projected earlier this year.
Climate action is waning. An EY survey of chief sustainability officers found that progress on sustainability initiatives is slowing "as early phases focused on ‘low-hanging fruit’ come to an end." It found a decline in company greenhouse gas emission reduction ambitions, from a median of 30 percent last year to 20 percent today, and a delay in the target year to achieve those ambitions, from a median of 2036 last year to 2050. Only 40 percent of executives say it’s either "likely" or "very likely" that their company will meet its decarbonization targets for the year ahead, according to recent Siemens research.
We’re losing ground. "The net-zero transition is not on track and the world is at risk of falling even further behind," a report from McKinsey concluded. "Current rates of emission reductions show that substantial progress is still necessary relative to where sectors need to be today to reach net zero by 2050.” Part of what’s needed: "a huge and concerted effort, particularly related to supply chain scale-up, capital allocation and citizen and consumer support."
Investors are wary. As the world’s largest investors scrutinize corporate progress, they’re not particul
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