Wildfires are burning across Australia; floods are overwhelming Europe; and a heat dome has produced record temperatures in North America. As the Intergovernmental Panel On Climate Change's (IPCC) sixth report warned earlier this year: "It is unequivocal that human influence has warmed the atmosphere, ocean and land." The climate crisis isn’t looming, it has arrived – and it's well past time to move from net-zero commitments to real action.
The Paris Agreement to hold global warming to 1.5°C was signed in 2015, with governments and businesses pledging to meet long-term net-zero goals, but, according to PwC's Net Zero Economy Index, decarbonisation simply isn't happening quickly enough. This means the world needs to radically accelerate its emission cuts in order to keep to the Paris Agreement.
The PwC report reveals a decarbonisation rate of 12.9 per cent is now needed to maintain the 1.5°C goal – that’s five times faster than 2020's rate of 2.5 per cent and eight times faster than the global average this century. While governments, businesses and the financial sector have stepped up, their existing commitments will not be enough to meet that 1.5°C target – action is needed to deliver on those pledges.
Indeed, while countries making up two-thirds of global GDP have net-zero targets of some sort, they are mostly so far failing to meet those goals – and that's despite emissions from energy falling during the pandemic, PwC notes. There are countries that have reported better than average rates over the last year, with Mexico and Indonesia recording the biggest reductions in emissions relative to their economic growth, but they are anomalies – collectively, the G20 is not doing enough.
On the industry side, the race to net zero is on, with an unprecedented surge in climate pledges made by the private sector over the last 18 months, sparked by pressure from governments as well as value chains, investors and customers. More than 2,000 companies are taking action by setting targets, or committing to set targets, to reduce their emissions through the Science Based Targets initiative (SBTi), while just under 4,500 are taking part in the Race to Zero Campaign. That means more than half of the sectors making up the global economy have committed to halve their emissions in the next decade. However, commitments alone aren't enough – they need to develop and implement workable strategies to transform high carbon business models now.