Abstract

This study examines the consistency of corporate decarbonisation targets by comparing target-based projections with recent historical emission trends and capital expenditure-based (CapEx-based) projections across eight climate-critical sectors: Airlines, Aluminium, Automobiles, Cement, Electricity, Oil and gas, Shipping, and Steel. The analysis combines company-disclosed information with a unique dataset of estimated emissions based on current and planned investments, benchmarked against the International Energy Agency’s Net Zero Emissions scenario. Results reveal an important ambition-credibility gap: although corporate targets may approximate scenario-consistent pathways, and ambitious targets are associated with more rapid decarbonisation, they appear highly ambitious relative to both recent historical performance and CapEx-based projections. This gap is particularly pronounced in absolute emissions, as many firms reduce emission intensity while sustaining or expanding production, thereby limiting the aggregate climate impact of target achievements.

Key takeaways

• Corporate emission reduction targets often approximate net-zero-consistent trajectories but remain substantially more ambitious than both recent historical performance and CapEx-based projections.
• The ambition–credibility gap is particularly pronounced in absolute emissions, where many firms reduce carbon intensity but sustain or expand production, limiting the aggregate climate impact of their targets. Misalignments are most severe in steel, oil and gas, and shipping, while electricity and automobiles display partial convergence with scenario pathways.
• Investors should anchor stewardship strategies to capital-expenditure plans, and regulators should mandate standardised disclosure of historical intensity trends and sector-specific physical indicators.

Authors

Vincent Bouchet
Director of ESG & Climate Research,
Scientific Climate Indices

Alex Clark
Research Director,
Asset Impact …………………………………………..

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