220 financial institutions with assets over US$29 trillion have asked 1,600 companies worldwide to urgently set science-based emissions reduction targets in line with a 1.5°C scenario, ahead of COP26 in November.
The companies targeted are thought to account for more emissions than the annual total of the US and EU combined.
Companies are being urged to set emissions reduction targets through the Science Based Targets initiative (SBTi) to ensure that their climate targets are independently verified, credible and robust.
The CDP has found that companies with science-based targets in place have typically cut emissions by 6.4% per year, well above the average rate needed for alignment with the objectives of the Paris Agreement.
The 2021 SBT Campaign is being coordinated by non-profit CDP (formerly known as the Carbon Disclosure Project) which runs a well-known carbon and environmental reporting system.
A number of large corporates with key global supply chains and US$500 billion in annual procurement (including L’Oréal, Renault, AstraZeneca and HP) have also joined financial institutions in asking for science-based targets.
According to the CDP:
“when so many investors and lenders are collectively saying the same thing, companies must act or risk seeing their cost of capital rise…not having an SBT raises a red flag that they are failing to manage climate risks.”