|On August 19th, the U.S.-based Business Roundtable made an intriguing announcement. They stated that the purpose of business extended beyond just creating shareholder value. Instead, a corporation’s commitment to stakeholders (customers, employees, suppliers and communities) mattered more.|
This is good PR and likely affirms the approach many companies are already taking, particularly as investment capital increasingly flows to companies with higher ESG ratings. Given the references to corporate environmental performance in the statement, we explored our GGEI data to see where these companies stand on putting words into action:
– Indeed, corporate power purchase agreements (PPAs) of clean energy have surged in the past two years, with the 13.4GW signed in 2018 by 121 different companies representing almost half of the total PPAs signed over the past decade.
– But in terms of concrete commitments to emission reductions, progress is more tepid. To date, 285 companies have approved science-based targets (SBTs) for emission reductions from their operations. But of the 181 signatories to the recent Business Roundtable statement, only 14 have approved SBTs.
– Globally, the recent GGEI analysis of climate action in the largest companies by market cap in the 130 countries covered shows that the majority of these companies had no published climate action plans, much less submitted SBTs for verification.
Companies and other private sector actors continue to leverage our work in sustainability measurement to generate bespoke frameworks suited to their sectors and diverse green strategies. Our first Insight of the year offered an example of how we approach this work, in case you missed it back in January.
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