A few years ago, excitement and enthusiasm for the energy transition was high. Companies across virtually every sector set “net-zero” emissions targets, many of which were bold and aggressive. However, it was easy to have enthusiasm when companies only had to declare bold and aggressive goals – especially when timelines for accountability exceeded the expected tenure of executives making those commitments. But the chickens are coming home to roost as companies find meeting intermittent goals is far more difficult or expensive than expected and general enthusiasm is waning. According to Reuter’s recent Energy Transition Insight Report 2024, companies are pumping the brakes on climate commitments, pushing goals back to 2050 or abandoning them altogether:
“A greater share of respondents in this year’s study indicate they expect to meet their energy transition goals by 2050, compared to last year. This, alongside other data, suggests there has been a softening in energy transition targets year-on-year…
[there has been] some softening of energy transition strategies and/or ambition within certain company types. While 92% of respondents from downstream oil and gas organizations said their company had an energy transition strategy in last year’s study, this share has fallen to 78% in our 2024 study. There is a similar decline witnessed in respondents from midstream oil and gas companies, the share falling from 91% in 2023 to 75% in 2024.”
These results are disappointing and seeing companies walk back climate commitments is not reassuring. However, there may be a silver lining.
Sustainability leaders, staff and advisors: Many companies’ goals were overly positive and unrealistic. Now, as reality sets in, adjustments may be more than kicking the can down the road – they are a more sober assessment of what companies are capable of doing. Executives may fear such a reassessment – especially if climate goals are embedded in compensation incentives. Point out that moving away from aspirations and toward concrete achievable goals is positive. Holding out against the trend is likely to be problematic sooner rather than later.
Our members can see examples of companies walking back climate commitments here.
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