Corporate pledges surge in five key environmental areas: McKinsey
Biodiversity particularly saw the largest increase in the share of companies setting targets.
A recent report by McKinsey & Company highlighted the overall increase in corporate pledges to protect various aspects of nature since 2022, with five out of six environmental dimensions showing notable progress.
These dimensions include water, chemicals and plastics, biodiversity, forests, and nutrients or nitrogen oxides (NOx).
More companies are now committing to dimensions of nature beyond carbon. Amongst the six dimensions, biodiversity saw the largest increase in the share of companies setting targets compared to 2023, driven by heightened awareness following the adoption of the Global Biodiversity Framework in 2022.
The share of companies setting targets in chemicals and plastics increased to 28% from 22%, whilst biodiversity targets saw a jump to 12% from 6%. These represent the largest percentage-point increases amongst the dimensions studied compared with last year.
Moreover, progress on plastic pollution may have accelerated over the past year because of policies such as the Extended Producer Responsibility (EPR) legislation for packaging, which assigns companies responsibility for their products’ end-of-life management.
Around the world, major companies have aligned with local EPR regulations to enhance recycling and disposal efforts for end-of-life vehicles.
In addition, net zero and carbon neutrality remain common commitments amongst companies, with more than 30% of the 2024 carbon targets focusing on net zero emissions.
For instance, in May 2024, Google, Meta, Microsoft, and Salesforce launched the Symbiosis Coalition, committing to 20 million metric tonnes of high-quality nature-based carbon removal credits by 2030.
Despite this, the percentage of companies with carbon commitments remained largely unchanged from 2023 to 2024.
Corporate commitments to nature are becoming more comprehensive. The share of companies with three or more nature-related targets rose to 26% in 2024, compared to 16% in 2022.
Whilst 46% of companies’ commitments start and end at carbon, 74% of companies with commitments in any other category also have commitments in two or more additional dimensions.
The manufacturing sector leads the greatest share of companies with three or more nature-related targets. However, two other sectors—construction and buildings and retail sales and services—demonstrated the greatest growth in that category, with increases of more than 10 percentage points and nearly six percentage points, respectively.
The share of construction and building companies with no targets remains the highest amongst sectors, at 52%, up two percentage points from last year.
The share of companies with three or more targets in transport and trade decreased by 3.9 percentage points compared with last year, whereas manufacturing, which includes automotive manufacturing, biopharma and healthcare technology, food, and beverage manufacturing, and electronics, increased by 4.8 percentage points compared with 2023.
The report also noted that Latin America emerged as a leader in setting three or more nature-related targets, with the number of companies increasing from four out of 14 studied companies last year to eight this year.
Europe remains the region with the largest companies with at least one target, driven by recent nature-focused policies such as the EUDR and the EU Nature Restoration Law and by the European Union’s continued focus on reducing carbon emissions through mechanisms such as the Carbon Border Adjustment Mechanism.
