SBTi-committed companies make up 35% of global market cap

On Monday the Science Based Target Initiative (SBTi) released its 2021 Progress Report, which contains a number of encouraging findings about the global economy’s progress on emissions reduction.

Here’s what we at The Climate Board took away from the report.

It won’t be long before participating in SBTi is simply an expectation for large companies. Overall participation in SBTi doubled in 2021, with 2,253 companies now either setting approved targets or formally committing to do so, up from 1,039 in 2020. Commitments aren’t languishing unfulfilled, either; the cumulative number of approved targets in 2021 also nearly doubled. The magnitude of SBTi’s growth is even clearer in economic terms: SBTi members now represent 35% of global market capitalization. $38 trillion in market value is now associated with ambitious climate action and emission reductions. This dramatic growth is a great sign for the planet, and for the emissions-conscious business community. As more companies sign on to SBTi, it will become harder for others to remain on the sidelines, and those who do run the risk of falling behind – not just on the declaration of their goals, but on progress towards them.

Companies with approved targets are outperforming important benchmarks. SBTi-approved companies reduced carbon dioxide-equivalent emissions by 29% between 2015 and 2020. They also have reduced their Scope 1 and 2 emissions since setting their targets by an average of 8.8% per year – more than twice the reduction needed to align with a 1.5°C temperature target. These companies are showing that measurable, meaningful, and sustained emissions reduction is possible. It’s also important to note that SBTi companies are outperforming their non-committed peers. Scope 1 and 2 emissions fell globally in 2020 by 5.6%, largely on account of the COVID-19 pandemic, but companies with approved targets pushed further, reducing their own emissions by 12.1%. It’s very encouraging that these companies did not settle for the “natural” emissions reduction associated with economic calamity, but indeed continued to lead and outperform. A powerful example has now been set for the hundreds of new participants in the SBTi.

Supply chain engagement is still an important missing link for driving emissions reduction through the economy. Scope 3 emissions tend to make up a significant share of a company’s emissions profile, with value chain emissions making up between 65 and 90% of a company’s overall carbon footprint. The small and medium sized-enterprises (SMEs) that make up much of larger companies’ value chains are beginning to play a more significant role in SBTi, as 177 SMEs set targets in 2021, up from only 29 in 2020. But many smaller companies will need support from larger partners to tackle decarbonization. It’s concerning that only 16% of companies have set engagement targets for their supply chains.

Complete and consistent emissions reporting is sorely lacking. SBTi found that in 2021, 28% of member companies had no public information regarding the progress made against their targets. That’s actually more than the 13% of companies not providing information in 2020. Perhaps some leeway can be given to the many new SBTi participants who have yet to build up reporting and disclosure capabilities, but the grace period must be short, especially as mandatory reporting looms in the United States and regulations strengthen worldwide. Transparency is essential to demonstrate progress, shine a light on best practices, and justify further investments.

On balance, we believe SBTi’s findings are news to celebrate, amplify, and reflect on. Corporate climate action is making an impact, and there’s plenty of reason to believe that progress will continue. But it’s always worth remembering that trends and statistics are made of real companies, led by real people, doing real things. Nothing is automatic or inevitable, and those hoping to lead the transition must continue to actively break down barriers to further action.

The Climate Board works with businesses to navigate climate issues and drive rapid progress. No matter where your company is in its climate action journey, we can help. Reach out to our team at for more information.

70% of voters support government intervention on climate

A Morning Consult survey published earlier this year and commissioned by the Environmental Defense Fund (EDF) found that 70% of voters, including 88% of Democrats and 54% of Republicans, believe it is important for the federal government to use policy measures such as tax incentives and regulations to accelerate the adoption of technologies that reduce greenhouse gas (GHG) emissions. Even more believe the government should invest in such technologies.

That a majority of both parties (not to mention 65% of independents) support government intervention for the sake of climate action stands in contrast to this week’s climate-related headlines. On Monday, the Securities and Exchange Commission (SEC) released its highly anticipated proposal to mandate climate risk and emissions disclosures. The only vote in opposition came from the SEC’s only Republican commissioner, Hester Peirce, who after voting no turned off her camera in symbolic protest, citing, tongue in cheek, her desire to reduce her own carbon footprint. Early commentary has followed the same partisan patterns. Allies of President Biden hailed the move as an important step forward, though some climate activists are disappointed that the rule does not go even further to mandate disclosures of Scope 3 emissions. Meanwhile, Republican party leaders have already expressed their disapproval, and the US Chamber of Commerce has stated its intent to fight what it calls “overly prescriptive” mandates to disclose information that is, in its view, “largely immaterial”. It is a safe bet that the battle lines will remain clear through the comment period and beyond. Most observers expect a mix of lobbying and legal action intended to weaken or delay the rule—especially in view of the prospect that a future Republican administration might take a decidedly different tack.

But Morning Consult and EDF’s findings should give pause to those who assume that momentum toward climate action will last only as long as Democratic governance. It is becoming clear to many stakeholders of all political stripes that the risks of inaction are too great to ignore. 90% of companies in the S&P 500 already publish sustainability and corporate social responsibility (CSR) reports, and announcements of new sustainability commitments and emissions reductions targets seem to come daily. These moves are responsive to investor and market demands, which in turn are driven by consumer preference and the objective truth of rising physical risk. More and more businesses, including our members here at The Climate Board, are planning for a competitive marketplace where climate-conscious strategies are absolutely required. Because the need for climate action will not subside with political change, companies setting emissions reductions targets and developing sustainability plans should be doing so with serious intent to deliver on those goals.


Only 1% of companies are fully disclosing their climate action plans

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The Carbon Disclosure Project (CDP) recently published the results of its 2021 Climate Change Questionnaire. This survey, which aims to assess the presence and quality of companies’ climate transition plans, includes questions about 24 indicators in 8 areas. Full disclosure was exceedingly rare; only 135 companies—just 1% of the over 13,100 surveyed—reported on all 24 key indicators.

On its face, such a paltry rate of completed questionnaires should worry both those concerned about companies’ commitment to climate action as well as those who hope data-gathering organizations like CDP are paving the way to a more transparent, standardized perspective. After all, what good is a survey that virtually nobody completes?

To be fair, things aren’t quite so bleak. While it’s true that few companies answered every question, most answered some. In fact, over 90% of respondents answered questions about their policy-related actions, and over three-quarters responded to those about corporate governance. It seems that there are plenty of companies willing to share some information about their climate challenges and ambitions.

The real cause for concern is how few companies specifically reported on their scope 1, 2, and 3 emissions (barely over 20% reporting on all 3), the climate related risks and opportunities they face (just under 20% reporting on both), or their intensity and net-zero targets (only 6% reporting both).

Why the steep drop-off? Reporting complexity and redundancy likely plays at least some role; CDP is just one of several reporting standards, including SASB[1], TCFD[2], and GRI[3]. Each standard has a different focus (e.g., ESG[4] vs. CSR[5]) and caters to a different audience (e.g., investors vs. a broader set of multiple stakeholders). What’s more, these frameworks are not mutually exclusive. Though many companies use only one framework, some report to multiple and others even select components of one platform against another. The lack of standardization often creates confusion over which framework(s) a company should utilize. It may well be that some companies are disclosing elsewhere, but not to CDP.

But the deeper issue is that questions about emissions and targets are simply harder to answer. They’re certainly more challenging from a technical standpoint. Consider the exact language of two different questions from the CDP questionnaire:

“On what issues have you been engaging directly with policy makers?”


“Account for your organization’s gross global Scope 3 emissions, disclosing and explaining any exclusions”.

It’s not hard to imagine which one of those would take more time to answer—or indeed may not be answerable at all given current data sources and definitions.

Concrete questions are also harder in terms of willpower. A company likely has few qualms about publicizing its policy preferences, but committing to concrete targets and honestly disclosing progress toward them—or lack thereof—is a different story. There’s little incentive to publicize unimpressive numbers.

What needs to change for next year’s perspective on corporate climate action to be clearer than this year’s?

  1. Platforms should work together to streamline, if not standardize, reporting processes :
    A single reporting standard is probably far away, and may not even be the right answer. But enhanced collaboration among sustainability disclosure organizations would ease the reporting process and ultimately increase the number of companies that adequately submit data.

  2. Companies should emphasize reporting capacity-building and skill-building efforts :
    As part of the climate planning process, companies should identify their obstacles to completely and accurately reporting on targets and progress. The removal of those obstacles, be they technical, political, or otherwise, is in itself a valuable step toward ultimate goals. Solutions may be internally sourced or vendor-driven, but any inability or unwillingness to report must be addressed.

  3. Failure to report should be worse than reporting failure :
    Investors, B2B customers, and individual consumers must signal ever more clearly their interest in full, honest disclosure, and should emphasize that real money is at stake. The market can set an expectation that all companies are open participants in the climate conversation, and then work proactively to help even laggards accelerate progress. But to do that, stakeholders must not tolerate silence.

[1] Sustainability Accounting Standards Board

[2] Taskforce on Climate-Related Financial Disclosures

[3] Global Reporting Initiative

[4] Environmental, social, and governance

[5] Corporate social responsibility

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