What they say, what they do and how they do it: An evaluation of the energy transition and GHG emissions of electricity companies

Abstract

The electricity sector is a critical player in combating climate change through the energy transition. Therefore, companies in the sector should align their policies and actions with the world's major environmental movements, such as the Sustainable Development Goals (SDGs) and Paris Agreement. This paper assesses the energy transition and GHG emissions mitigation by the electricity sector using Paris Agreement targets and evaluates the impact of SDGs and science-based targets adoption on their decarbonization. From 2017 to 2019, we evaluated 39 global electricity companies using their sustainability reports and the Science Based Targets initiative (SBTi) based on Paris Agreement global warming scenarios of 1.5 °C and well-below 2 °C (WB2°C). We discovered that all companies prioritize climate change actions, with 87% linking these actions to at least one SDG. When analyzing whether GHG emission reductions were in line with either Paris Agreement scenario, this figure dropped to 51%. Companies with SBTi met the 1.5 °C and WB2°C targets at a rate of 92% compared to 32% of companies without SBTi. We concluded that SDG adoption had no effect on mitigation results and that companies with SBTi performed significantly better in terms of emissions reduction and transition to renewables, although there was no proof of causality. These findings can help with the adoption of more effective policies for the implementation of SDGs and their prioritization in the sector, as well as encourage emission targets based on consolidated methodologies to guide companies' actions.