Under pressure from activists, investors, and governments, companies have in the past few years been hyping their pledges to cut greenhouse gas emissions. Sounds good. But as many critics have asserted, the pledges don’t mesh with either the reality of what the vast bulk of corporations are doing or the reality of the climate crisis.
Carbon Market Watch and the NewClimate Institute scrutinized 24 of the world’s biggest companies across eight industrial sectors that have pledged to attain carbon neutrality and advertised themselves as climate leaders. The companies include Apple, Microsoft, PepsiCo, Nestle, JBS Foods, Amazon, Mercedes Benz, and Walmart.
In the two organizations’ second edition of the Corporate Climate Responsibility Monitor released last week, the authors note:
Most companies’ climate strategies are mired by ambiguous commitments, offsetting plans that lack credibility and emission scope exclusions, but replicable good practice can be identified from a minority. [...]
Companies’ 2030 targets cannot be taken at face value. Nearly all the 24 companies that we assessed have pledged 2030 targets, but we find that these targets can rarely be taken at face value. For many companies, 2030 targets address only a limited scope of emission sources, such as only direct emissions (scope 1) or emissions from procured energy (scope 2) and only selected other indirect emission categories (scope 3). Scope 3 emissions account for over 90% of the GHG emission footprints for most of the companies we have assessed. For others, 2030 targets are misleading due to reliance on offsetting.
Climate pledges for 2030 fall well short of the economy-wide emission reductions required to stay below the 1.5°C temperature limit. For the 22 companies with targets for 2030, we find that these targets translate to a median absolute emission reduction commitment of just 15% of the full value chain emissions between 2019 and 2030. This may increase to 21% under the most optimistic scenario that emission intensity targets translate to equivalent absolute emission reductions. This compares to the need to cut global GHG and CO2 emissions by 43% and 48% between 2019 and 2030 respectively, to be in line with the goal to limit the global temperature increase to 1.5°C.
“Can rarely be taken at face value.” In other words, many of these companies are lying.
Carly Wanna at Bloomberg Green reported (paywall):
Overall, the authors found the climate strategies of 15 of the 24 companies to be of low or very low integrity. Just five—H&M Group, Holcim, Stellantis, Maersk, and Thyssenkrupp—commit to decarbonizing their emissions by at least around 90% by their respective net-zero target years.
Ten of the 24 companies were also analyzed in the [latest] report but the authors found that, despite some improvements in the guidelines around climate targets, there had been limited progress in the transparency or integrity of their climate strategies over the past year.
The 177-page report also points out that offsetting plans, like protecting a carbon dioxide-absorbing forest in order to continue emissions at company operations, “remain a major stumbling block for the credibility of corporate climate strategies.” Many offsetting plans are scams, such as protecting forests that nobody was going to cut down anyway. Or they’re even worse. For instance, the Vatican was given offset certificates for millions of trees that were never planted. The monitor report notes that “None of the offset projects reported by companies represent the high-hanging fruit of mitigation potential.”
Said Thomas Day, an analyst at the nonprofit NewClimate Institute, “Nearly all companies are making these pledges. They’re making them as a response to consumer and investor pressure. But in making these voluntary targets, they’re also making the case to regulators that they do not need to be regulated.”
The Corporate Climate Responsibility Monitor’s report doesn’t just reveal the paltry efforts of most of the companies whose pledges it points out. The fundamental idea behind the monitor isn’t a gotcha of corporate failure on climate pledges but rather getting companies to do better. In this realm, the authors make extensive recommendations, with emphasis on good practices in climate responsibility, including tracking and disclosure of emissions, reporting all upstream and downstream emissions, including those of subsidiary companies, and setting specific, substantiated, and transparent emission targets.
There is only so much activists and think tanks can do. Getting these and other major companies to improve their pledges and actually carry them out will require a lot more investor pressure and government scrutiny. If only serious penalties could be imposed for spreading public relations bullshit on a matter of existential importance, perhaps we could make greater progress in getting emissions under control.
The clock is running, tick, tick, tick ...