Mainstream corporate climate methods impose inequitable burdens on emerging economies: Evidence from the cement industry

The principle of national “common but differentiated responsibilities and respective capabilities” (CBDR-RC) is integral to the Paris Agreement but has been overlooked at the corporate level. Current corporate climate target methodologies like the sectoral decarbonization approach (SDA) and absolute contraction approach (ACA) use grandfathering principles, favoring high-emitting incumbents, yet their equity implications remain poorly understood. Here, we compare carbon budget allocations for the global cement sector—a sector contributing 8% of global emissions and critical for sustainable development—based on equity principles versus SDA and ACA. We find stark differences in mitigation burdens: SDA and ACA impose substantially heavier burdens on companies in India and Indonesia (where 49% and 19% of urban populations live in slums) compared to equity-based approaches. The results have profound implications for sustainable development and international trade, making a compelling case for integrating equity in the private sector net-zero governance to realize a just global transition.