The world's largest privately owned companies are severely lagging their public market peers when it comes to setting climate targets, according to an analysis by the nonprofit Net Zero Tracker released on Wednesday.
Just 32 of the 100 biggest private firms have set a target to reach net-zero carbon emissions, compared with 69 of the 100 largest public companies, the study showed.
In high-emitting sectors such as energy, infrastructure and manufacturing, only 14% of the private firms' annual combined revenue is covered by such a target compared with 77% of revenues from listed firms in the same sector.
The quality of the targets for those that have them is also poorer, the study found, with firms less likely to include shorter-term goals, cover the full scope of their emissions or contain detail about how the firm uses carbon offsets.
Just four of the private firms with a target actually had a plan to deliver on their pledge, potentially exposing the companies - and the economies in which they operate - to greater risk as the world transitions to a low-carbon economy, the study said.
“Private firms are falling devastatingly short on net zero compared with their publicly-listed cousins," said John Lang, project lead of the Net Zero Tracker.
As listed companies increasingly face mandatory climate-related disclosures, Thomas Hale, professor at Oxford University's Blavatnik School of Government, said there was a risk private firms escaped scrutiny and gained an unfair advantage.
"Smart regulation is needed to create a level playing field and close a potentially enormous loophole in corporate climate action," he said. (Reuters)