This report highlights examples of best practice and gaps inreporting, provides a snapshot of Taskforce on Climate-related FinancialDisclosure (TCFD) adoption rates and an insight into how companies are settingobjectives for meeting the Paris Agreement. It also examines the disclosure, comparability and depths ofclimate scenario analysis and physical risks assessments.

‍Key findings:

• Many companies are ambitious – 45% of companies have set net zero targets for their scope 1 and 2 emissions. Encouragingly, 73% of these companies are aligning these targets to the 1.5°C
  trajectory.
• However only 9% of companies have 1.5°C-aligned net zero targets covering all applicable emissions scopes.
• The momentum towards net zero is not matched by short and medium-term target setting.
  Longer-dated net zero targets (for example, net zero by 2050) need intermediate absolute  emissions reduction milestones to succeed. Without measurable short and medium-term targets addressing how companies intend to reach their net zero aim, there can be little confidence it will be achieved.
• Only 3% of companies assessed have a net zero commitment in addition to an emissions reduction target for scope 1, 2 and, if applicable, scope 3 emissions. Only 1% of companies has set these targets in line with 1.5°C.
• Predominantly due to this lack of aligned short and medium-term targets, this analysis finds there will be a 36% overspend of the ASX200-specific 1.5°C carbon budget for the period 2021-2050 (an overspend of 741 MtCO2e).
• 48% of companies have not set any absolute emissions reduction targets.

*Note:  percentages are as a proportion of 187 companies). Targets disclosed before 31 March 2022 form the basis of this analysis. This analysis does not test the credibility of a company’s underlying approach to decarbonisation, but instead looks at whether the proposed targets are sufficiently ambitious.