Companies in Asia-Pacific making progress on net zero

Companies in the Asia-Pacific region have shown stronger net-zero commitments and better disclosures on greenhouse gas emissions, according to a report from PwC, which analyzed the progress of over 700 companies in 14 Asia-Pacific countries

With more and more global concern over the climate crisis, countries around the world are feeling pressure to set concrete goals on cutting emissions. Some international agreements have set those goals to paper: The Paris Agreement aims for 45% fewer emissions by 2030 and net zero by 2050.

While many countries have followed through with legislation that pressures private enterprise, others have lagged behind. The PwC report shows that, overall, countries in the Asia-Pacific region are doing quite well, with the majority already having net-zero goals in place.

More net-zero commitments

A total of 53% of companies across the Asia-Pacific region have disclosed net-zero targets. This marks a notable increase from the previous year’s 47%, though there is a pretty large disparity among countries.

Mainland China and Vietnam have set very few net-zero targets, while Australia leads the way with the highest percentage of companies that have set targets. Other leading countries are Japan, South Korea, Malaysia, and Thailand.

Publicly disclosing a net-zero commitment is a big step for companies on the path towards sustainability. These goals not only put pressure on the company to act within a deadline, but also tend to have a positive effect on stakeholder trust and help boost competitiveness.

Gap between ambition and action

Without real action, net-zero commitments end up being little more than just words on paper. While many companies have set ambitious net zero goals, the report shows that there is a significant gap between these commitments and concrete, verified actions.

New Zealand has the highest percentage of companies that align with the net-zero standard set by the Science Based Targets initiative (SBTi), which established internationally agreed-upon goals that are in line with the Paris Agreement.

Among the companies that already have net-zero targets in place, 37% described their targets as science-based, but only 18% have had their net-zero targets verified by the SBTi. Japan reported the highest percentage of companies with targets verified by SBTi in both 2023 (36%) and 2024 (49%).

These numbers are significant because SBTi-verified targets offer a more structured and credible framework for action on sustainability. They provide a clear pathway for companies to reduce their emissions and align their goals with the established scientific consensus on climate change.

Scope 3 emissions

The importance of scope 3 emissions cannot be underestimated. These are all indirect greenhouse gas emissions that occur within a company’s value chain, such as those from suppliers, transportation, and the use of sold products. Because they are not directly controlled by the company, they are the most difficult to rein in.

The report shows a slight increase in the disclosure of scope 1, 2, and 3 emissions. Many Asia-Pacific companies reported that they are still in the process of measuring scope 3 emissions, but the percentage of companies that have disclosed those emissions increased from 50% in 2023 to 63% in 2024.

While the disclosure of scope 3 emissions has increased significantly, most companies do not offer much information on these emissions. That makes it hard to understand their environmental impact and tends to hinder decarbonization strategies.

The bottom line is that the importance of climate change issues in Asia cannot be underestimated, as these nations are disproportionately vulnerable to its impacts, facing significant threats to their economies, livelihoods, and even their very existence.

In addition to that, many Asian countries (like mainland China) have huge manufacturing sectors and have historically had high levels of emissions. However, other developed countries like the US also have high levels of emissions.

“We seem to have built strong ‘muscles’ across several areas including sustainability governance, identification of sustainability material topics, identification of climate risks and opportunities,” said Fang Eu-Lin, partner at PwC. “We will need to continue building ‘muscles’ in better climate risks quantification, and scope 3 comprehensiveness, as we get better data and insights.”