Virtually all major U.S. utilities have turned net-zero emissions targets into a corporate mantra, reflecting a major shift for the country's once coal-heavy power sector. Still, groups tracking the utilities' progress warn that the industry is not transitioning fast enough, slowing the broader economy's shift away from fossil fuels.

. This story is part of a series of articles examining the net-zero climate pledges of companies across a range of sectors. Click on the links below to see other stories in the series as they become available. Overview: Stakeholders demand action on ambitions as pledges swell Oil and gas: Oil, gas industry on trajectory to miss 2-degree climate goal Mining: Drive to lower emissions pays in metals, mining sector Utilities: Progress by US utilities 'too slow' Healthcare: EU pharma accelerates pledges while US plays catch-up Technology and media: Plenty of 'E', but less 'S' or 'G' in tech, telecom Banking: Banks' pledges come with reluctance to ditch polluters .

All but four of the 30 largest U.S. utilities have set net-zero greenhouse gas emissions targets for 2050, reflecting shareholder and policymaker pressures. Ten have promised to decarbonize sooner, the latest survey by S&P Global Market Intelligence shows.

But in the absence of national clean energy mandates, many utilities are already falling behind their newly minted climate goals.

"Progress is too slow because the level of reductions we need is substantial," said Dan Bakal, senior director for electric power for the investor group Ceres. "We need to get to 80% by 2030 and not enough utilities have made that kind of commitment. We need to see more movement."

Offtrack for 1.5 degrees C

Eight out of 10 leading U.S power companies in a recent study by the World Benchmarking Alliance received poor grades because they are exceeding their carbon budgets, or what utilities can emit over a period of time and still meet certain temperature targets. That means they are not on track to meet the goal to limit global warming to 1.5 degrees C above preindustrial levels as spelled out by the Paris Agreement on climate change.

Half a dozen participating U.S. utilities are still in the early stages of managing their greenhouse gas emissions, according to a study by the Transition Pathway Initiative, a tool developed by asset managers to help investors gauge corporate climate risks. This compares to the 11 U.S. power companies that have developed a more "strategic and holistic understanding" of climate risks and opportunities, which they have then integrated into their business strategies.

Only five of the 33 U.S. utilities that the tool tracks have emissions intensities aligned with the Paris Agreement goal that scientists say is needed to avoid the worst impacts of climate change. Seventeen of the utilities analyzed are instead on track for "below 2 degrees."

Emissions dropped 40%

Under growing pressure from investors and state climate mandates, the power industry continues to close coal-fired plants and ramp up investments in renewable energy sources. U.S. power plant carbon emissions in 2020 had declined 40% since their peak in 2006. Coronavirus lockdowns exaggerated last year's emissions drop, setting the stage for power plant pollution to climb as the economy recovers.

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So far, only four of the nation's 30 largest utilities — Public Service Enterprise Group Inc., Eversource Energy, CenterPoint Energy Inc. and Avangrid Inc. — have promised to decarbonize their operations by 2035, the target year the Biden administration set for the industry. As recently as June, just two utilities had pledged to do so, the Market Intelligence analysis shows. Another five utilities previously announced net-zero targets for 2040 or 2045.

Public Service Enterprise Group's commitment more than 30 years ago to set carbon reduction goals has allowed PSEG to aim for carbon neutrality by 2030 — ahead of nearly all other U.S. utilities, noted Ralph Izzo, the utility's chair, president and CEO.

"Setting long-term goals is an essential tool for helping all of our stakeholders — investors, customers, suppliers, government leaders, regulators and employees — understand the motivation behind the decisions we make as a company," Izzo said in an email. "For example, when we pursue transactions that are consequential for our business, such as our exit from coal generation … our goals help stakeholders understand how such moves fit into our long-term strategy to address climate change."

Are net-zero goals for real?

But some utilities have also raised eyebrows for making investments or long-term business decisions that seem to be out of sync with their promises to help slow Earth's warming.

PPL Corp., for example, joined the net-zero club in August when it pledged to cut greenhouse gas emissions by 80% by mid-century. The company said it would use carbon capture or other emerging technology to eliminate the remaining pollution from its power plants, but carbon capture has not yet been proven, much less scaled up, for the power sector.

PPL's plan to keep one Kentucky coal unit operating until 2060 also raises questions given the company's acknowledgment that its strategy hinges on robust investments in research and development to abate emissions from the plant, and possibly using carbon offsets as a last resort.

High natural gas prices this year have also served as a reminder that net-zero-pledging utilities will burn coal if economical. Coal generation is expected to rise to 23% of total power production in 2021 from 20% last year. Market forces have therefore given the country's struggling coal industry a temporary respite while fueling debate over how quickly the U.S. can decarbonize.

Meanwhile, CenterPoint plans to invest at least $16 billion to expand its natural gas infrastructure across its eight-state service territory — a strategy the watchdog group Energy and Policy Institute claims is inconsistent with the utility's ambitious climate goal. CenterPoint made a splash in September when it announced it would reach net-zero emissions by 2035, 15 years before most of its peers.

"I think it's really important to be vigilant about the commitments that utilities are making in terms of their emissions reductions and to pay attention to their capital expenditure plans," EPI researcher Karlee Weinmann said. "I think a lot is revealed when we're looking not just at the utility narrative about how they're working toward net-zero but also at how they're actually operationalizing that within their business."

Money speaks

Investors may ultimately have the final say. In his conversations with utilities over the past four years, Bakal has seen a growing number of companies become sensitized to shareholder concerns over climate change and gradually shift their strategies.

In October, a coalition of five investor groups with $60 trillion in assets called on the world's largest utilities, several of which are based in the U.S., to decarbonize by 2035 in line with the Paris Agreement. In the long run, investor advocates say, power companies in need of low-cost capital cannot afford to ignore such pressures.

"There's been a real acceleration of commitments by utilities and we now see them focus on natural gas, upstream and downstream," Bakal said. "We're also seeing them recognize that they can't focus only on the Scope 1 emissions coming from their own generation."

S&P Global's utility survey shows that half of the largest 30 utilities include Scope 2 emissions in their climate goals, which are associated with the purchase of energy and not just those that stem from a company's own operations.

Another eight utilities also cover some or all Scope 3 emissions, although how they will rein them in is unclear. Scope 3 greenhouse gases, which include those emitted when a utility customer buys and uses energy, are the hardest ones to measure and abate because they fall outside a utility's control and ownership.