Basak Nur GOKCAM
Reducing carbon emissions is critical to slowing down global warming and keeping the planet’s temperature constant at 1.5 degrees Celsius. In this context, it is possible to say that the number of companies targeting net zero emissions and shaping their investments accordingly and receiving green financing support is increasing exponentially every day.
According to the Science-Based Targets Initiative’s 2023 Monitoring Report, there has been a significant increase in the number of companies setting net zero emissions targets. Although this increase is directly affected by the success of the targets and the effectiveness of the carbon credits purchased by the companies, the report also shows that carbon credits are mostly ineffective, and in fact, carbon credits are often ineffective, and they also pose a risk of slowing down real decarbonization efforts.
According to the report, the number of companies with a net zero emissions target increased by 102 percent compared to the previous year, reaching 4,205. However, the problem is that a significant portion of the companies on the list cover sectors with low emissions intensity, and only 1.3 percent of the companies are from the energy sector.
In addition, while there were 6 companies in Turkey with a net zero emission target in 2022, this number increased to 16 in 2023. Assessing the situation, Assoc. Prof. Dr. İzzet Arı drew attention to the fact that the positive impact created in the projects was exaggerated and said, “In reforestation projects, the risk of deforestation is exaggerated and thus the amount of carbon prevented is overestimated.
“Therefore, more carbon credits are given than the emissions actually prevented. Offset projects are not a reliable method of measuring their real impact. The future of voluntary carbon markets and their ability to become an effective solution to combat climate change depends on comprehensive improvements in transparency and governance,” he said.
İzzet Arı, who emphasized that the fundamental problem with current carbon management models is that there are no clear conditions regarding the emission reductions that need to be made before going down the carbon offset path by purchasing carbon credits, said: “In short, a company is not obliged to do its best to reduce its own emissions; it is not required to set science-based targets or plan how it can play a role in broader sustainability initiatives; it can reduce its emissions on paper by purchasing carbon credits directly.
“The first thing companies need to do is review their entire business plan and look for ways to avoid carbon-intensive activities as much as possible. The second step is to increase efficiency; the third step is to replace carbon-intensive energy sources with low-resource alternatives. Buying carbon credits is a last resort, recommended only to offset emissions that cannot be prevented by these steps,” he said.
Japan leads in target setting
According to the Monitoring Report, the number of companies setting science-based targets increased the most in Europe, with 53 percent. Europe was followed by Asia with 27 percent and North America with 14 percent of cities centered there. The number of companies with net zero emissions targets in 2023 increased by 102 percent compared to 2022, reaching 4,205.
Assoc. Prof. Dr. İzzet Arı stated that an optimistic picture of progress is drawn when these companies represent 39 percent of the market capitalization of the global economy, and said, “When the number of companies with a net zero emission target of 4 thousand and setting a net zero emission target in 2023 is examined, it is seen that Japanese companies are in the lead. It is striking that there are also companies based in developing countries such as India, Mexico and Indonesia on the list.”
Stating that companies operating in the service sector account for 32.3 percent of companies with a net zero target, Arı said the energy sector represents only 1.3 percent.
SMEs are ahead in science-based target setting
Assoc. Prof. Dr. İzzet Arı stated that SMEs (Small and Medium Enterprises) are ahead of corporate firms and financial institutions in science-based goal setting, and said, “SMEs are at the top with 2,253. While the number of corporate firms is 1,866, financial institutions are at the bottom with 86. The high rate of SMEs setting science-based goals can be interpreted as an indicator of the increasing awareness of sustainability and climate action among small businesses.”
Türkiye is above the global average in 2022
only six companies have net zero targets. Noting that this number will rise to 16 by 2023, Assoc. Prof. Dr. İzzet Arı commented, “This increase rate, which is above the global average, indicates that companies in developing countries can take a more active role in reducing emissions compared to national governments. On the other hand, it is also noteworthy that sectors with low emission intensity and that prioritize advertising due to customer service are more numerous on the list. The fact that energy companies are at the bottom of the list reveals that quality should be given importance as much as quantity when evaluating the status of net zero targets.”
Source: www.dunya.com
