Businesses are under unprecedented regulatory and competitive pressure to accelerate their journeys to net zero, as governments increasingly introduce policies that mandate emissions disclosures, levy the carbon content of imported goods, and reward sustainable business practices with grants and incentives.

Given the urgent need to make progress, where do companies stand on decarbonization today?

Its fourth annual Destination Net Zero report examines the world’s 2000 largest companies by revenue (G2000), focusing on their decarbonization efforts and progress toward achieving net zero. Accenture found encouraging signs. In their latest year of reporting, 55% of the G2000 (of those with emissions data) reported lower Scope 1 and 2 emissions totals than in 2016.

Emissions intensity is also dropping, with the typical company cutting emissions per unit of revenue by 6% annually since 2016. Indeed, 52% of companies with data had cut both absolute emissions and emissions intensity, indicating that businesses are rewiring for sustainability to reach net zero emissions.

The research also found that 37% of G2000 firms have set full net zero goals across Scopes 1, 2 and 3. Although this represents an increase of just 0.3 percentage points from last year, it is 10 percentage points higher than 2021, the first year of its study.

Moreover, the proportions rise significantly when considering only operational emissions targets, covering just Scopes 1 and 2. A solid majority (65%) of companies now have at least operational targets in place, up 11 percentage points from last year and 26 percentage points from 2021.

The gap between companies setting full net zero targets and those focusing only on operational emissions highlights the challenges in addressing Scope 3 emissions, especially for heavy industries that are hard to decarbonize. Speeding up progress in these high-emitting sectors is crucial, as broad decarbonization—and the global transition to net zero—depends disproportionately on the outcomes they achieve.

The foundations to reach net zero are clear. Companies across the G2000 are using a wider range of actions—or 'decarbonization levers'—in areas like energy efficiency, renewables, circularity and digital technology. Some levers are specifically designed to tackle distinct emission hotspots. They are more widely adopted in industries where these issues are particularly pressing. But broader and faster implementation is still needed: on current trends, only 16% of G2000 companies with emissions data are on track to reach net zero in their operations by 2050 (down from 18% in 2023).

In addition to using basic strategies more effectively, the adoption of next-generation levers will be critical for corporate decarbonization. To fully integrate decarbonization into strategy and operations, companies need to incentivize action through internal carbon pricing, greening IT and reinventing business models to capture new value in a decarbonizing world.

AI could also be a game-changer. It is already a powerful business tool, boosting productivity and innovation for workers and companies alike. It holds similar promise for corporate sustainability and the energy transition.

However, AI’s high energy demands could undermine emissions reductions. In this year’s study, for the first time, Accenture looked at which companies are using AI—and find that many more need to use it with a focus on decarbonization to help them achieve net zero.

Companies can push the frontier by adopting next-generation levers, with AI playing an increasingly important role in driving decarbonization efforts.

Targets are not enough though. Companies with targets and transition plans typically reduce emissions faster than those with targets alone. Organizations should aim to develop transition plans to reach their targets, incorporating near-term actions and milestones and ensuring validation by credible external bodies. Over half of the G2000 do not have a climate transition plan in place. They need one.