Corporate GHG Reduction and Net-Zero Targets: A Multidisciplinary Assessment of Companies’ Targets, their Legal and Business Drivers, Potential Obstacles to their Achievement, and Strategies to Drive Real GHG Reductions

Recently, there has been a surge of net-zero and other greenhouse gas emissions reductions target-setting by corporations.   Despite this momentum toward corporate net-zero targets, there is a lack of information about whether these corporate goals result in real emissions reductions. Given the importance of reducing corporate emissions to achieving US climate commitments, there is a need to better understand how these pledges are working and design strategies to ensure they are effective. 

The emissions impact of net-zero commitments is an open, empirical question where robust analysis has been limited because of challenges with data and other issues. For example, whether net-zero plans may shift emissions instead of reducing them represents a significant risk. There is a need to understand what is happening and then ask what strategies and regulations would help to ensure that corporate pledges are meaningful, verifiable, accountable, and able to support the energy transition and spur systems change. 

This project, led by a cross-disciplinary team of experts in environmental and administrative law, environmental economics and policy, and sustainable business strategy, aims to fill that gap by objectively and rigorously analyzing the impact of U.S. companies’ commitments and the implications for U.S. policy. The Cluster will analyze corporate emissions reduction pledges, help uncover potential challenges and unintended consequences, and offer new solutions and regulatory strategies to drive real emissions reductions.  

More specifically, the Cluster is assessing the actions corporations take in response to net-zero commitments, including how targets shape corporate behavior and greenhouse gas emissions reductions. This empirical research entails examining how companies with net-zero targets behave compared to companies without them to understand how targets influence firm decision-making; analyzing the environmental effectiveness of corporate commitments, including whether and how emissions reductions are achieved; and gaps or failures in implementation. Additionally, the Cluster seeks to understand the legal and business drivers of these commitments, including regulatory and non-regulatory pressures to assess what can encourage corporate commitments that will result in real emissions reductions.