What are the world's most profitable companies doing to reduce their emissions?

Introduction

Stakeholders and consumers are increasing pressure on companies to reduce their environmental impact and take meaningful climate action. Some of the world’s largest and most profitable corporations are working to meet climate targets, but despite their efforts, emissions remain significant. This analysis examines the efforts made by the 208 largest companies in the Forbes Global 2000 ranking with publicly available data to reduce their emissions.

First, we explore the level of commitment from these companies to the Science-Based Targets initiative (SBTi), a global framework that helps companies set ambitious, science-driven climate goals. The SBTi has become a key benchmark for companies pursuing voluntary, credible, and measurable actions to reduce emissions.

Secondly, we analyse the scope of emissions data coverage in terms of public reporting.

Thirdly, we assess the engagement of companies in the voluntary carbon market (VCM), focusing on those that have retired carbon credits.

Lastly, we examine the involvement of companies in the carbon removals market, focusing on those that have publicly committed to investing in carbon dioxide removal (CDR).

The 2023 Forbes Global 2000 list ranks the largest companies globally by sales, profits, assets, and market value. Robert Höglund of Marginal Carbon compiled emissions data for the top 250 companies on this list. Notably, only 208 of these corporate giants report their Scope 1 and 2 emissions for 2022, highlighting a significant transparency gap. This analysis focuses on these 208 companies with publicly available information for the year 2022.

Data from Höglund's publicly available profit and emissions database reveals that these 208 companies emit billions of tonnes of CO2 annually. In 2022, they collectively produced over 12.7 billion tonnes of CO2, accounting for 34% of global emissions (IEA), with an overwhelming 91% coming from Scope 3 sources.

Science-based targets

The Science-Based Targets initiative (SBTi) was established to help companies set emission reduction targets in line with climate sciences and Paris Agreement goals, and it is recognised for setting the highest bar for net zero goals. Since 2015, almost 10,000 companies have joined the initiative to set a climate target, with 6,194 companies having an approved target set.

The SBTi offers companies a structured and scientifically credible pathway to reduce emissions. With near-term targets (Textbox 1) providing the foundation for significant emission reductions by 2030, companies are encouraged to adopt ambitious net-zero targets. Although the initiative is voluntary, it is one of the few frameworks companies can use to demonstrate alignment with global climate goals.

Out of the 208 largest companies globally with publicly available data, 80 (38%) have set near-term emission reduction targets under the SBTi, while an additional 23 (11%) are committed to doing so. However, 5 companies (2%) had their commitment removed for failing to present their targets within the required deadline. Meanwhile, 100 companies (48%) still do not commit to the SBTi. Figure 1 illustrates these figures.

The sectors with the highest number of companies with a near-term target set are healthcare & pharmaceuticals, technology hardware & equipment, and consumer goods & retail. The sectors with the highest number of companies committed to setting a target are insurance and automotive. Notably concerning is that high-emission sectors, such as oil and gas and mining, are among those with the fewest companies making any type of commitment.

Banking is also among the sectors with few companies making commitments. However, unlike the oil and gas sector, where emissions are concentrated in Scope 1 and 2, most of the banking sector’s emissions are in Scope 3, due to their investment portfolios.

Among the same 208 companies, 23 (11%) have set targets to achieve net-zero under the SBTi, 29 (14%) are committed to net-zero, 9 (4%) had their commitment removed, and 147 (71%) have no net-zero commitment. Figure 2 illustrates these figures.

Among the companies that have had their net-zero commitment removed are Johnson & Johnson, Microsoft, Netflix, Pfizer, P&G, Unilever, and Walmart.

Until recently, the SBTi held a firm stance against using carbon credits towards emission reductions. However, in a recent statement, the SBTi acknowledged the potential of environmental attribute certificates, including carbon credits, as a tool to address climate change—provided they are supported by scientific evidence and robust policies. The current Corporate Net-Zero Standard (CNZS) is under revision aiming to refine the approach to neutralisation and clarify near-term actions for addressing residual emissions. See our analysis here.

Publicly disclosed emissions

For the companies whose emissions data could be collected, we found that Scope 1 emissions were equivalent to 1.5 billion tCO2e, with the oil & gas sector responsible for more than half of this amount. In this ranking, 20 oil & gas companies are included, such as PetroChina, ExxonMobil, Saudi Aramco, Chevron, and Shell. Other sectors that stand out for their high Scope 1 emissions include utilities (18%) and mining & materials (15%).

Scope 2 emissions totalled 381 million tCO2e. The oil & gas sector remains the largest contributor, accounting for 32% of these emissions. However, in second place comes media & telecommunication services contributing 15%, followed by technology & hardware, with 9%.

Scope 3 was found to be 11.6 billion tCO2e, with the oil & gas sector once again responsible for nearly half (49%) of these emissions, followed by the automotive sector (15%) and technology hardware & equipment (12%). Figure 3 illustrates these figures.

An analysis of both the commitments to the SBTi and the emissions shows that companies with near-term targets set account for 25% of the total Scope 1 and 2 emissions of the most profitable companies’ total emissions, while companies committed to set a near-term target account for only 2%. About 71% of the emissions are not associated with any commitment.

Among the companies committed to net-zero, those with net-zero targets set cover 10% of emissions, while companies committed to net-zero cover 7% of total emissions.

VCM engagement

In the absence of sufficient emissions reductions, many companies have turned to the voluntary carbon market to offset their carbon footprints. Approximately 37% of the most profitable companies are active in the VCM, having retired carbon credits in recent years (2023-2024).

Historically, these companies have retired approximately 83 MtCO2e. That’s equivalent to 4% of the Scope 1 and 2 emissions of these companies, or 0.7% of their Scope 3 emissions.

Approximately 25% of companies were previously engaged in the market but are no longer engaged (retiring credits until 2022), including Chevron and Meta Platforms. For the remaining 38%, no record of retirements was found in the VCM.

The sectors with the highest number of companies retiring credits are, by far, banking (17%), followed by diversified finance (12%), and oil & gas, and technology hardware & equipment, both at 10%.

In terms of the volume of credits retired, the oil & gas sector leads significantly, accounting for around 43 MtCO2e, or 52% of all credits retired, followed by the automotive sector with 12%, and healthcare & pharmaceuticals with 12%. Some beneficiaries (companies retiring credits) are consistently among the top beneficiaries of retired credits, such as Shell with nearly 30 MtCO2e credits retired so far, and Volkswagen and Takeda Pharmaceutical, each with around 10 MtCO2e.

The use of carbon credits provides flexibility for companies that are unable to eliminate emissions in the short term. It is particularly appealing to industries like oil and gas, which face technological and economic barriers to decarbonisation.

The use of carbon credits is also one of the types of sustainable engagement in developing countries, since carbon credits deliver more than just emissions reductions, with the co-benefits, like biodiversity protection and local economic development.

Removals engagement

In addition to offsetting emissions through projects that reduce the emissions, some companies are exploring carbon removals to meet their climate targets. Removals are essential for companies with net-zero ambitions, particularly for those that cannot eliminate all emissions internally.

Moreover, removals are aligned with the broader climate objective of not just mitigating but reversing atmospheric CO2 levels.

However, engagement with removals remains limited among the most profitable companies. Only fourteen companies (7%) are involved in the removals market, including early adopters like Microsoft, and members of buyers’ clubs such as Frontier (e.g. Alphabet and JPMorgan Chase) and NextGen (e.g. Mitsubishi Corporation).

For this analysis, we examined data from CDR.fyi to track purchase agreements and retirement data from Puro.earth and Isometric, two carbon removal registries.

To date, Frontier has made 506,157 tonnes of carbon dioxide removal (CDR) purchases, and NextGen has made 193,139 tonnes. Among companies outside buyers’ clubs, there are over 9.3 million tonnes in purchase agreements, with Microsoft alone responsible for 88% of that (8.2 million tonnes).

Additionally, these companies collectively have only 64 ktCO₂e retired in public registries, a mere 7% compared to their total purchase agreements.

Three of the fourteen companies active in the removals market have not yet set near-term targets, and one of them recently removed its near-term target.

Thus, even though companies have committed to purchasing or offtake agreements, only a very small percentage has been retired in public registries (or actually delivered).

The most engaged sectors in the removals market are software & services and trading companies & conglomerates.

Meanwhile, none of the 23 companies with established net-zero targets are currently engaged in the removals market.

Conclusion

Despite growing pressure on companies to take meaningful climate action, a significant portion of the largest global corporations’ emissions remain unaddressed.

While some sectors, such as healthcare and technology, have made progress in setting near-term and net-zero targets under the SBTi, high-emission industries like oil and gas and mining remain under-committed.

Scope 3 emissions continue to dominate, representing a major challenge, particularly for sectors like oil and gas, which account for nearly half of these emissions.

Furthermore, approximately one-third of the most profitable companies have actively retired carbon credits in recent years. However, over half of the companies have not engaged with carbon credits market, and some have ceased their participation.

Additionally, engagement in carbon removals remains limited, with only 7% of companies involved. This reflects a significant gap between corporate climate ambitions and the necessary actions to meet long-term net-zero goals.