Assessing Science-Based Corporate Climate Target-Setting
Jun 9, 2023
Assessing whether companies can achieve their climate targets is increasingly relevant for institutional investors aiming to decarbonize investment portfolios and reduce real-economy emissions of greenhouse gas. Although more and more companies are setting climate targets, including science-based emissions-reduction targets, the likelihood that these targets will be met is not always evident.
In this report, we found that, on average, companies that had committed to SBTi standards were more likely to have disclosed value-chain emissions, target-level data and GFANZ-recommended metrics than companies that had not. Companies with SBTi commitments also appeared to have made further progress on integrating emissions-reduction technologies into their product portfolios and accelerating the use of renewable energy.
The results of this assessment highlight how rigorous third-party validation processes like those under SBTi offer scope to enhance the transparency of corporate decarbonization strategies and to improve the likelihood that companies can achieve such climate targets.
Corporate Scope 1, 2 and 3 emissions disclosure in line with the GHG Protocol
Based on constituents of the MSCI ACWI Investable Market Index (IMI). Of the 9,171 constituents in the MSCI ACWI IMI, 3,753 companies had set ongoing climate targets for target years of 2023 and beyond as of March 1, 2023. This analysis excludes the double counting of issuers that are listed in multiple stock exchanges or have issued multiple classes of share types. Source: CDP, MSCI ESG Research
The Road to Science-Based Corporate Net-Zero Target Setting
What challenges do companies face in setting science-based net-zero targets under the SBTi corporate net-zero standard?Explore more
A Framework for Attributing Changes in Portfolio Carbon Footprint
We present a framework that allows investors to understand to what extent changes in a portfolio’s carbon footprint are due to companies’ real-world decarbonization efforts, a portfolio manager’s investment decisions or changes in companies’ financing.Learn more
The MSCI Net-Zero Tracker
This report offers investors, companies, financial intermediaries and policymakers an objective gauge of the contribution by the world's listed companies to total carbon emissions and their progress toward a net-zero economy.Read more