Hundreds of corporations are proclaiming their climate commitments with four little words: net-zero by 2050. But are they taking their vows seriously?
A new Corporate Climate Responsibility Monitor report examined 25 global giants – from Amazon to Volkswagen – that have publicly made net-zero or carbon-neutral commitments. According to lead author Thomas Day, there are no standards governing these goals or how they are achieved, so the researchers were looking for best practices to share. Instead, Day says, “We were frankly surprised and disappointed at the overall integrity of the companies’ claims.”
In sum, the researchers found the companies’ sustainability pledges lazy, suspect or outright misleading. Moreover, they reported, “many company pledges are undermined by contentious plans to reduce emissions elsewhere, hidden critical information and accounting tricks.”
The study found that only 13 of the 25 have committed to explicit emission reductions. But closer analysis revealed that those firms, on average, were on track to reduce their total value-chain emissions by just 40% – not the full 100% that “net-zero” implies.
“We’re fooled into believing that these companies are taking sufficient action, when the reality is far from it,” noted Gilles Dufrasne, policy officer at Brussels-based Carbon Market Watch, which collaborated on the study with the German-based NewClimate Institute.
The report focuses on four key themes: how companies track and disclose emissions, how they set emission-reduction targets, how they reduce emissions, and how they take responsibility for unabated emissions through climate contributions or climate offsets. In all, the researchers found that only one company (Danish shipping company Maersk) out of 25 had a net-zero pledge of “reasonable integrity.” Three companies were credited with “moderate integrity”: Apple, Sony and Vodafone. Ten companies were found to have “low integrity” carbon pledges, while the remaining firms ranked “very low,” including BMW Group, JBS, Novartis and Nestlé.
A few companies fought back. Nestlé said the report contained “significant inaccuracies” and assured chocolate lovers that its “climate roadmap” is “rigorous and extensive.”
The report authors concluded that regulators should not rely on consumer and shareholder pressure to drive corporate action. Said co-author Silke Mooldijk “Companies must be subject to intense scrutiny to confirm whether their pledges and claims are credible, and should be made accountable in the case they are not.”
Speaking of scrutiny, in March the Bureau of Investigative Journalism found that BlackRock and several banks have “quietly downplayed their environmental commitments so they can keep doing business with deep-pocketed U.S. [oil] states.” Rhode Island senator Sheldon Whitehouse told the Bureau, “If they have not been honest with investors about their climate policies, then this is certainly a matter for [financial regulator] the SEC to look into.”