North American Firms Are Filling Roles But Flail On Climate Action
Like many parts of the world, North America has seen devastating weather events driven by climate change, with Hurricane Ian sitting in an eight-way tie for the fifth-strongest storm to ever strike the US and Hurricane Fiona hitting coastal Canada in September. Cumulative costs of recovery from climate disasters across both countries are soaring into the hundreds of billions of dollars.
At the same time, federal funding from the Inflation Reduction Act of 2022 in the US and the Emission Reduction Incentives Agency Act in Canada offer market opportunities to corporations ready to act. Action on environmental sustainability is also being incentivized by consumers whose concerns about climate change affect their purchasing decisions. And investors such as Brookfield Asset Management have raised $15 billion for a fund that will help the most polluting industries transition to environmentally sustainable practices.
To see how North American firms are responding, we researched the sustainability goals of the top 50 North American corporations (NA50) in the Fortune Global 500 rankings and compared them to peers in other geographies. Among other findings, a striking division between leadership and action came into focus, as we discovered that NA50 firms are:
- Emphasizing accountability. Ninety-four percent of NA50 firms have appointed an executive to lead their sustainability programs, including reporting, policy, and relationships, a far higher share than the top 200 companies globally in the Fortune rankings (G200) that have done so. It’s a higher share, even, than the top 50 companies based in Europe, Middle East, and Africa (EMEA50) in the Fortune rankings.
- Playing catch-up on operations emissions. Comparable to the EMEA50, 68% of NA50 firms have set targets to reduce emissions from their direct operations and purchased electricity (called scope 1 and 2 emissions, respectively) by a future year. Where NA50 corporations lag is in aiming for a year by which to achieve carbon-neutral or net-zero operations — that is, reducing emissions from CO2 or all greenhouse gases, then offsetting the rest. Only 22% of NA50 firms have set such a goal, about half as many as their EMEA50 peers.
For detailed analysis of the environmental sustainability goals of North America’s largest corporations and guidance on how your organization can steer through the storm, read our latest research here or schedule an inquiry with our analysts. And check out our newly launched research theme, the green market revolution, to read more of our coverage on environmental sustainability across Forrester!