The Lazard Climate Center paper, Behind Schedule: The Corporate Effort to Fulfill Climate Obligations, reviews the state and progress of carbon emission reduction commitments made by corporations, as well as potential consequences of falling behind on pledges.
- From a sample of large U.S. corporations between 2010 and 2020, 72% of firms have not reduced emissions at a sufficient pace to meet their committed targets.
- Commitment failures are present across all industry sectors, with the largest failure differentials. occurring for Communication Services, Materials, and Information Technology firms.
- The smallest failure differentials between pledged and actual emission reduction trajectories are observed in the Utilities, Industrials, and Financials sectors.
- U.S. climate deregulation in 2017 engendered a rise in failing commitments, and the subsequent global lockdown in 2020 contributed to a reduction in failing commitments as emissions significantly dropped.
- Investors do not presently assign material financial weight to corporate pledges as we observe no statistically significant changes to firm-level price-to-earnings ratios as a result of carbon reduction commitments.