Business leaders around the world are trying to understand what a rapidly changing climate means for their company and industry, and what their role is in tackling the problem. Many are already leading the way in taking action to cut emissions. More than 13,000 companies have committed to cutting their emissions in half by 2030 through groups like the Science Based Targets initiative and the SME Climate Hub. Corporate procurement of renewable energy is rising faster than ever before. Yet is it enough? Is business moving fast enough to make an impact on global warming? And what about the potential of companies and markets to accelerate action, to influence government policies, and turbocharge the solutions that will deliver a sustainable, clean energy future for all?

At COP21 in 2015, with the negotiation of the landmark Paris Agreement, world leaders agreed that in 2023 they would take stock of their collective efforts to meet its goals. As nearly 200 nations prepare to meet in Dubai this year for COP28, the culmination of the first UNFCCC Global Stocktake represents a critical moment to course correct and to accelerate climate action where it is most needed. And as nation states are taking stock, so is business.

The Corporate Climate Stocktake (CCST) led by the We Mean Business Coalition and supported by the UN Climate Champions team and Bain & Company is the most ambitious, forward-looking review to date of private sector progress, obstacles and opportunities for achieving net zero. Each sector stocktake presents progress against international or national targets, and identifies the barriers faced by businesses that are rapidly decarbonizing to meet their climate targets.

Incorporating the voice of businesses as we course correct

The release of the Global Stocktake synthesis report in September 2023 confirmed what we already knew, “the world is not on track to meet the long-term goals of the Paris Agreement.” Amongst a series of insights, the report finds, “achieving net zero CO2 and GHG emissions requires systems transformations across all sectors and contexts, including scaling up renewable energy while phasing out all unabated fossil fuels, ending deforestation, reducing non-CO2 emissions and implementing both supply- and demand-side measures.” Ultimately, the GST concludes “much more action, on all fronts and by all actors, is needed now.”

At one level, these conclusions acknowledge the limitations of the Paris Agreement. The transformation of our global economy into a net-zero emission system involves a series of technological transitions within economic sectors, with value chains spanning multiple countries. Intervention at the level of nation-states is therefore important but not sufficient. Sector transitions are kickstarted by innovation – with important national level support – but gain momentum as technologies progress along learning curves and diffuse across national boundaries. Here further acceleration relies on coordinated industrial policies and other cross-border policies. So while an international climate framework centered around targets and national emissions is important for setting the international direction of travel and ensuring transparency, it is not ideally suited to efficiently drive technological transitions within economic sectors. Equally, its report card – the Global Stocktake – is unlikely to capture the extent of the dynamism at the forefront of these transitions.

In contrast to the broad focus of the Global Stocktake, the Corporate Climate Stocktake takes a focused approach by examining the pace of clean solutions adoption within individual economic sectors and giving a clear voice to those operating at the frontier of clean energy innovation. For while it is true that nation-states are falling short of their climate goals, the pace at which clean energy technologies are being developed and deployed continues to exceed expectations. 3

The aim is to provide a forward-looking business perspective on the progress in transitioning the energy system away from fossil fuels and into clean solutions. Because understanding the pace of change within each sector and the specific systems barriers is at least as important as understanding the global state of climate action, and it’s essential for informing our approach to course correction over the coming decade.

The corporate climate stocktake approach

The CCST is based on surveys of 250 business leaders and detailed interviews with sector leading companies, industry experts, as well as an assessment of forward-looking indicators and corporate commitments. In total the exercise includes input from over 300 of the world’s largest emitters and a data-based analysis of eight key transition sectors: power, road transport, concrete and cement, steel, shipping, agriculture, aviation, and hydrogen.

This report captures evidence from business leaders at the forefront of driving the change in their industries: to understand the pace of change in each sector, the barriers they are facing, and what our most ambitious companies need from governments to go faster. The approach in each sector is to examine the data available today that provides insight into the future; interviews and surveys with business give voice to the barriers frontier companies perceive across different segments or geographies; where possible case studies or examples are presented to demonstrate how business innovation and policy is enabling businesses to overcome barriers.