Not long ago, the International Federation of Accountants (IFAC) analyzed 600 company GHG disclosures from across the globe. They published the results of their work in this report. Here are what I found to be the major takeaways concerning emissions reduction targets and goals:
- 397 companies report GHG emissions reduction targets, with 5% of those companies reporting both “absolute” and “intensity” targets.
- 61% of company target disclosures were not clearly “absolute” or “intensity” in nature, or the targets were based on emissions disclosures that were net of carbon offsets.
- Most companies (90%) with an emissions target also provide narrative about how they plan to reach their target.
- 39% of the companies reviewed include Scope 3 emissions their reduction targets.
- Targets with a date earlier than 2050 are common in finance or “light industries,” such as technology, cosmetics, pharmaceuticals, or beverages.
The top 5 GHG reduction strategies reported were:
- Renewable energy (82%)
- Efficiencies (82%)
- Transportation (27%)
- Product design (22%)
- New technologies (10%)
The top GHG offset strategies reported were:
- Nature-based removals
- General offsets
- Carbon capture
- Carbon credits
IFAC’s report is good reading for anyone involved in corporate GHG reporting. It also contains a helpful comparison between the TCFD, draft ISSB IFRS S2, draft ESRS E1 and SEC’s climate disclosure proposal across the 4 pillars of TCFD, which are emerging as the most common foundation for GHG disclosure principles (just over half of the companies reviewed referenced the TCFD framework). Numerous examples and excerpts are provided as well. This would be one report to put on the top of your reading list.