One of the outcomes of the COP26 climate summit in Glasgow in November last year has been a renewed focus on accountability. This is especially important when it comes to assessing how pledges of net zero carbon and other green house gases (GHG) are progressing. While the immediate subject of such scrutiny has been in the realm of national policies—especially for those countries that have announced a net zero year target—it is equally important to hold to account large multinational corporations that have stated green policies or are working, at least on paper, to reduce their GHG emissions.
It was, therefore, rather disheartening to learn that some of the largest companies in the world are reportedly far from meeting their emissions targets, and that their transparency on such matters is also low. This is the finding of a new report, Corporate Climate Responsibility Monitor 2022 that was published on 7 February. A collaboration between the Belgium-based not-for-profit Carbon Market Watch and the Germany-based NewClimate Institute, the report takes a look at the state of net zero pledges made by 25 companies. These include the likes of Nestlé, Vodafone, Sony, Maersk, Unilever, Google and Amazon.
Major companies’ #NetZero climate pledges largely fail test. 🚨 Our Corporate Climate Responsibility Monitor, launched today w/ @CarbonMrktWatch, finds: Companies have an immense potential for #ClimateAction but pledges lack transparency + integrity. 🧵⤵️ https://t.co/SYjLkdEIc4— NewClimate Institute (@newclimateinst) February 7, 2022
On the basis of the companies’ stated commitments and actions, the report finds that most firms are falling well short of their aims. International shipping company Maersk, which has pledged to reach net zero by 2040, is showed as doing the best in the list, with the report saying that it’s ‘integrity level’ is ‘reasonable’, as is the company’s transparency about how it will get there. Other companies that rank high are Apple, Sony and Vodafone, whose ‘integrity level’ is ‘moderate’ and transparency is ‘reasonable’. However, other household names like Amazon, Google, Nestlé and Unilever rank as ‘low’ to ‘very low’ on integrity and similar in terms of transparency.
The report states that taken together, the efforts of the 25 companies don’t make much of a dent on global emissions. Far from the nearly 100% reduction in emissions required, their efforts would reduce emissions by only about 40%. The report also says that none of the companies are doing well when it comes to nearer term targets, as their cumulative emissions would only decrease by 23% by 2030, nowhere near enough. “As pressure on companies to act on climate change rises, their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their ambitions,” says NewClimate Institute’s Thomas Day, who is the lead author of the report.
A part of the problem of this poor showing, according to the report, comes from carbon offsetting, a process that most of the companies rely on when formulating their net zero pledges. According to the report, this is of dubious value, especially when there’s no transparency on how exactly are the companies offsetting their emissions. It is now a well established fact that growing trees and maintaining forests can lock in carbon over a longer period of time, but cannot really compensate for huge amounts of near-term emissions. The study, in its policy recommendations, says that governments should ban corporations from making claims on net zero and carbon neutrality. There should be more stringent oversight on how companies will meet these targets, and that this should be dependent on cutting emissions, instead of offsetting.
Some of the companies named in the report have responded. Speaking to The Guardian, an Amazon spokesperson said, “We set these ambitious targets because we know that climate change is a serious problem, and action is needed now more than ever. Amazon is on a path to powering our operations with 100% renewable energy by 2025, five years ahead of our original target.” Meanwhile, a Unilever spokesperson said, “While we share different perspectives on some elements of this report, we welcome external analysis of our progress and have begun a productive dialogue with the NewClimate Institute to see how we can meaningfully evolve our approach.”
It is now clear that better frameworks are needed to ensure that net zero pledges aren’t merely made as a form of, at best, virtue signaling, and, at worst, greenwashing. When the report was published, the United Nations Framework Convention on Climate Change (UNFCCC) released a statement saying it would work with NewClimate Institute to “improve minimal standards” for net zero pledges and that members of the UNFCCC’s ‘race to zero’ campaign “must meet a ‘starting line’ criteria, meaning that they pledge a net zero target in line with global efforts to limit warming to 1.5C, submit a plan, and report back annually on progress”.