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Only 11% of companies are hitting their emissions goals

November 1, 2021, 6:55 PM UTC

A corporate leader doesn’t need to be a huge environmentalist for emissions reduction to be high up on their agenda. The tight labor market alone might be enough motivation: Among millennials, 71% say addressing climate change should be a national priority—and some of them are serious about only working for firms who take climate change seriously.

But are companies living up to their lofty emissions goals? To find out, Fortune reached out to Boston Consulting Group’s GAMMA team. They gave us exclusive access to their Carbon Measurement Survey. In all, they surveyed 1,290 organizations across the globe in August.

Here’s what we found.

The numbers to know 

85%

  • … of surveyed organizations say they’re concerned about reducing their emissions.

9%

  • … of surveyed organizations are able to measure their emissions “comprehensively.”

11%

  • … of surveyed organizations say they’ve reduced their emissions in line with their ambitions over the past five years.

30% to 40%

  • … is the amount by which the typical firm thinks their emission estimates are off by.

48%

  • … of surveyed organizations say an AI-based automated footprint calculation would help them get to the next level when it comes to cutting emissions.

Big picture

  • Companies have a long way to go when it comes to meeting their emission goals. While nearly 9 in 10 companies say they are serious about reducing emissions, just 11% say they are meeting their goals. Even that figure could be an overestimate. After all, BCG’s GAMMA team finds most firms say their emission measurement is off by at least 30%.

A few deeper takeaways

1. Corporate America knows its emission calculations are flawed. 

Among surveyed companies, 76% admit they are unable to measure the full carbon footprint of their products and services.

Why the disconnect? The BCG’s GAMMA team say “the root cause of poor accuracy lies in the collection of granular data and emissions factors.” Their suggestion is for firms to use AI-based methods in order to improve their emissions calculations. (Charlotte Degot, a managing director and partner at BCG, recently gave a TED Talk on the topic).

2. The private sector is leaving the public sector behind in its dust.

It’d be understandable to assume that nonprofits (via pressure from donors) and governments (via self-imposed regulation) would be the leaders in emissions measurement and reduction. But they aren’t. In fact, of the nine sectors BCG’s GAMMA team measured, they’re the worst. Only 19% of public sector and nonprofit organizations were in BCG’s stage 3 or stage 4 for emission cutting (aka the top two levels). It turns out energy companies are actually the best at it: On BCG’s emissions measurement and reduction scale, 56% of surveyed energy firms were in stage 3 or stage 4.

What’s going on? Here’s what the BCG’s GAMMA team researchers say: “As expected, the energy and industrial goods industries are leading in maturity because of heavy regulation and the market’s high expectations of them…The relative immaturity of other industries represents a lack of sector-specific regulation and the non-prioritization of emissions reduction.”

I’d love to know what you think of the newsletter. Email me with feedback at lance.lambert@fortune.com.

Lance Lambert
@NewsLambert

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