Only 16% of Largest Companies on Track for Net Zero Goals with Nearly Half Seeing Increased Emissions, Accenture Analysis Finds

Rhea-AI Summary

Accenture's 'Destination Net Zero' report reveals only 16% of the world's largest companies are on track to achieve net zero emissions by 2050, while 45% saw increased carbon emissions. The analysis of 2,000 major companies shows that while net zero target-setting has stalled at 37%, 52% have reduced both emissions and emissions intensity since 2016. AI adoption for decarbonization remains low at 14%, with AI-related emissions projected to increase 10-fold by 2030. European companies lead in net zero targets (64%) and AI adoption for decarbonization (20%), significantly outperforming Asia Pacific and North American counterparts.

Positive

• 52% of analyzed companies have reduced both carbon emissions and emissions intensity since 2016
• Five key decarbonization levers are adopted by at least 80% of companies
• 30% of companies are adopting 15 or more decarbonization levers
• European companies show strong leadership with 64% having net zero targets

Negative

• Only 16% of companies are on track to reach 2050 net zero goals
• 45% of companies increased carbon emissions
• Net zero target-setting has stalled at 37% of companies
• AI-related emissions projected to increase from 68 to 718 million tons CO2e by 2030
• Only 14% of companies use AI for carbon emissions reduction

Insights

Sustainability Research Analyst

The findings reveal concerning trends in corporate decarbonization efforts. With only 16% of major companies on track for 2050 net zero goals and 45% showing increased emissions, this signals significant challenges in meeting global climate commitments. The adoption of 15+ decarbonization levers by 30% of companies shows some progress, but regional disparities are notable - European firms lead with 48% adoption versus lower rates in Asia Pacific and North America.

The projected 10-fold increase in AI-related emissions to 718 million tons CO2e by 2030 presents a critical challenge. However, the 80% adoption rate of key sustainability levers (energy efficiency, waste reduction, renewables) indicates growing operational commitment. The gap between target-setting (37%) and actual emissions reduction (52%) suggests companies are taking action even without formal commitments.

AI Technology Analyst

The current 14% adoption rate of AI for emissions reduction represents a massive untapped potential. While AI could initially increase emissions, the technology's long-term decarbonization benefits are supported by executive sentiment, with 65% expecting emissions reductions in the 10+ year timeframe. Accenture's development of an ESG-focused large language model, trained on 15,000+ reports with 70% productivity improvements, demonstrates practical applications for AI in sustainability reporting and compliance.

AI boom could further threaten 2050 decarbonization commitments unless used responsibly and scaled to its full potential as a lever of achieving net zero

NEW YORK--(BUSINESS WIRE)-- Only one in six (16%) of the world’s largest companies are currently on track to reach net zero emissions in their operations by 2050, while close to half (45%) continued to increase carbon emissions, according to new analysis from Accenture (NYSE: ACN). The analysis also showed a need to expand how AI is used to reduce emissions within and across companies, as only 14% of companies display evidence of using the fast-advancing technology for carbon emissions reduction today.

Despite net zero target-setting stalling, majority of companies have cut carbon emissions (Graphic: Business Wire)

In its fourth year, Accenture's "Destination Net Zero" report is an analysis of net zero commitments, carbon reduction activities and emissions data for the 2,000 biggest companies worldwide. The report found that while full net zero target-setting has stalled at 37%, more than half (52%) of companies have cut both carbon emissions and emissions intensity since the Paris Agreement was adopted in 2016.

“A majority of the world's largest companies are now cutting their emissions even as the size of their operations and revenues grow. While this is a significant milestone, to get to net zero by 2050 all of us need to move faster, together, to reinvent sustainable value chains using deep collaboration and transformative technologies,” said Stephanie Jamison, global resources industry practice lead and global sustainability services lead at Accenture. “AI can help but can only go so far when only 22% of AI-employing companies are currently using it for decarbonization, the most realistic scenario is probably one in which AI initially emits more than it abates, until a critical crossover point. Responsible and sustainable scaling of AI means ensuring that crossover point is reached as early as possible.”

Accenture modeled the expected incremental use of AI-focused hardware in data centers around the world and forecast that AI-related emissions will rise more than 10-fold, from 68 to 718 million tons CO2e by 2030, in the absence of major innovation in energy systems, computing technology and algorithms. However, most leaders are optimistic about AI's potential in decarbonization. When asked about their expectations of how AI will affect emissions globally, more leaders expect it to reduce emissions (42%) rather than increase emissions (27%) in the short-term (1 to 3 years), and a clear majority (65%) expect AI to reduce emissions over the long term (10+ years).

In a sign of positive change that businesses are starting to rewire for net zero and focus on operationalizing their decarbonization strategies, many of the levers companies can pull to decarbonize their operations and value chains have started to become standard business practice: five key levers—energy efficiency, waste reduction, renewables adoption, circular principles and decarbonization of buildings—are each adopted by at least 80% of companies, and 30% are adopting 15 or more levers.

Regionally, that percentage increases to nearly half (48%) of European companies adopting 15 or more levers--a share that is more than 20 percentage points higher than that of their Asia Pacific and North American counterparts. In addition to far outpacing their peers in having more than double the proportion of businesses with net zero targets (64%), European companies also lead the way on AI adoption. For example, one in five European businesses (20%) are using AI for decarbonization purposes, compared to 14% in the Asia Pacific and 10% in North America.

“The recent Draghi report highlights the need for Europe to marry decarbonization with competitiveness,” said Mauro Macchi, CEO of Accenture, EMEA. “It's therefore encouraging to see businesses across the region taking a lead both in setting ambitious net-zero targets and using new technologies such as AI to reduce carbon emissions. This will help boost growth and resilience as regulations such as the CSRD come into force.”

Accenture continues to place an ever-greater emphasis on creating financial value and sustainability impact for clients by expanding capabilities and investing in expertise across sustainability strategy, supply-chain transformations, green IT and data-driven management of decarbonization. Its Sustainability Services portfolio helps clients improve their environmental, social, and governance (ESG) and carbon intelligence. This set of capabilities helps organizations control, improve, and create value and reduce impact by using carbon—and broader sustainability—data and intelligence in decision-making across the core business.

As an example, Accenture built a custom large language model for ESG reporting using Meta Llama 3.1. It helps sustainability teams prepare their data collection and reporting requirements at a time of increased regulation. The tool has more than 16,000 hours of GPU training on over 15,000 ESG reports and can improve productivity by upwards of 70% by structuring ESG data and assisting in drafting ESG disclosures based on regulatory standards.

Explore “Destination Net Zero” in Accenture’s thought leadership app, Foresight, and get a personalized feed of our latest insights, data, case studies and more at https://www.accenture.com/foresight.

About the research

This analysis takes stock of global corporate emissions trajectories, net zero targets, decarbonization levers and transition plans. Our sample was based on the Accenture G2000: an Accenture-developed list of the top 2,000 public and private companies in the world by revenue. We worked with The SmartCube to collect data on the G2000 across a given set of criteria relating to decarbonization. This involved manual inspection of company public documentation (e.g. websites, annual reports, sustainability reports). The approach allowed us to build a proprietary database of the decarbonization targets and levers adopted by companies in the G2000.

Emissions data retrieved from: S&P Global Trucost 2024. We then analyzed emissions trends up to the latest available year to look for evidence of an acceleration in decarbonization and identify relationships with the target and lever data.

As part of Accenture’s regularly fielded pulse surveys of ~3,000 top corporate executives, we included questions to gather insights on the expected impact of AI on global and corporate carbon emissions. We also modeled the future energy consumption and emissions impact of AI use by using projected AI data center growth and regional carbon emissions data.

About Accenture

Accenture is a leading global professional services company that helps the world’s leading organizations build their digital core, optimize their operations, accelerate revenue growth and enhance services—creating tangible value at speed and scale. We are a talent- and innovation-led company with 774,000 people serving clients in more than 120 countries. Technology is at the core of change today, and we are one of the world’s leaders in helping drive that change, with strong ecosystem relationships. We combine our strength in technology and leadership in cloud, data and AI with unmatched industry experience, functional expertise and global delivery capability. Our broad range of services, solutions and assets across Strategy & Consulting, Technology, Operations, Industry X and Song, together with our culture of shared success and commitment to creating 360° value, enable us to help our clients reinvent and build trusted, lasting relationships. We measure our success by the 360° value we create for our clients, each other, our shareholders, partners and communities. Visit us at www.accenture.com.

Copyright © 2024 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241110890385/en/

Alexander Aizenberg

Accenture

+1 917 452 9878

alexander.aizenberg@accenture.com

Source: Accenture

FAQ

What percentage of companies are on track for net zero emissions by 2050 according to Accenture (ACN)?

According to Accenture's analysis, only 16% of the world's largest companies are currently on track to reach net zero emissions in their operations by 2050.

How many companies increased their carbon emissions according to Accenture's 2024 report?

According to the report, 45% of the analyzed companies continued to increase their carbon emissions.

What is the projected increase in AI-related emissions by 2030 according to Accenture's analysis?

Accenture forecasts that AI-related emissions will increase more than 10-fold, from 68 to 718 million tons CO2e by 2030.

What percentage of European companies have net zero targets according to Accenture's findings?

According to the report, 64% of European companies have net zero targets, more than double the proportion of their global counterparts.