Despite the escalating climate crisis and 2023 marking the hottest year on record, corporate progress on decarbonisation has slowed. A new study by Boston Consulting Group (BCG) and CO2 AI reveals that companies have made minimal progress on climate issues over the past year.
In the fourth edition of BCG and CO2 AI’s Carbon Emissions Survey, detailed in the report “Boosting Your Bottom Line Through Decarbonisation”, 1 864 executives were surveyed, including 191 from South Africa, Nigeria and Egypt overseeing their company’s emissions measurement, reporting, and reduction initiatives. The respondents represent 16 major industries across 26 countries, and collectively are responsible for approximately 45% of global greenhouse gas emissions. Each organisation has at least 1 000 employees and annual revenues ranging from $100-million to more than $20-billion.
This survey builds on BCG and CO2 AI’s 2021, 2022, and 2023 investigations into the progress that companies have made on emissions management and reduction, and the actions they can take to decelerate climate change.
“This year’s survey highlights the substantial rewards some companies are reaping from decarbonisation, including significant financial gains, enhanced reputations, and operational efficiencies,” says Hubertus Meinecke, BCG’s global leader of climate and sustainability and a co-author of the study.
“Too few companies are seizing the financial gains offered from decarbonisation,” says Diana Dimitrova, a BCG managing partner, director, and a co-author of the study. “By mastering essential foundational actions like measurement, reporting, target setting, and taking advanced steps toward sustainability, these companies can become more efficient, more profitable, and demonstrate a stronger commitment to a greener future.”
Among the nearly 2 000 companies surveyed in 2024, only 9% described comprehensive reporting of Scopes 1, 2, and 3 emissions. Additionally, just 16% have set targets across all three scopes, and only 11% have achieved emissions reductions in line with their ambitions.
These figures are all lower than those reported by companies in 2023.
Companies in Brazil, India and China are leading the way in comprehensive emissions reporting, target setting, and achieving emissions reductions in line with their goals.
Seven percent of African executives surveyed confirmed comprehensive reporting of Scope 1, 2 and 3 emissions, representing an increase of 97% compared to 4% of respondents in 2023 when the continent was behind the global average on comprehensive reporting. While other regions reported a decrease in year-on-year comprehensive reporting in 2024, Africa was the only region to report an increase.
Even as overall progress seemed to slow, 25% of the businesses that BCG and CO2 AI surveyed reported annual decarbonisation benefits equal to more than 7% of their revenues for an average net benefit of $200-million a year. One of the leading sources of these benefits was a reduction in operating costs, often resulting from initiatives focused on efficiency, waste reduction, the rationalisation of materials or footprints, or the use of renewable energy.
Notably, nearly half of the companies in Africa surveyed (43%) reported significant benefits from decarbonisation, which is well above the average of 25% of companies globally gaining value from decarbonisation. 9% of African respondents are reducing emissions along the 1.5°C Paris Agreement pathway, above the survey average of 8%.
Foundational actions are the initial steps in a company’s decarbonisation journey and optimising them often leads to decarbonisation excellence and significant value capture.
- Measurement. Companies measuring all three scopes comprehensively are 1,6-times more likely to experience significant decarbonisation benefits.
- Reporting. Companies fully reporting each scope are 1,5-times more likely to experience significant decarbonisation benefits.
- Target setting. Companies setting validated targets for each scope are 1,9-times more likely to experience significant decarbonisation benefits.
When reviewing Scope 1 reduction target-setting reporting figures, Africa is making headway following global leader Asia-Pacific – 64% of African respondents compared to 72% of Asia-Pacific respondents.
Africa continues to drive action across the other areas with 50% of respondents confirming reduction target-setting of Scope 2 emissions and 42% of respondents reporting reduction target-setting of Scope 3 emissions.
Ten percent of African executives confirmed that they are reducing emissions in line with their ambitions. This is slightly less than the survey average of 11%.
Beyond foundational steps, companies can increase emissions reductions and potential rewards through advanced actions. According to the survey, these tech-enabled actions boost accuracy, impact, and value capture.
- AI usage. Companies using AI to reduce emissions are 4,5-times more likely to see significant decarbonisation benefits. AI tools enhance sustainability efforts by automating tasks, freeing teams to focus on strategic goals like cutting emissions and capturing value.
- Product-level emissions. Companies that calculate product-level emissions are 4-times more likely to experience significant decarbonisation benefits.
- Climate transition plans. Companies that adopt a climate transition plan are 2,9-times more likely to experience significant decarbonisation benefits and 3,3-times more likely to reduce emissions in accordance with a 1,5°C pathway.
“The window for companies to increase ambition and take decisive action to limit global warming to 1,5°C is rapidly narrowing, but AI has the potential to be a game changer, empowering businesses to reduce emissions and make meaningful strides toward mitigating climate change,” says Charlotte Degot, CEO and founder of CO2 AI and a co-author of the report. “Our research shows the need for companies to double down on using AI responsibly to make sure they can deliver their climate goals and bottom-line business targets.”