We must reduce greenhouse gas emissions by 43% by 2030 if we want to keep global warming to 1.5 degrees Celsius above pre-industrial levels and avert the worst effects of the climate crisis.
However, according to the climate goals of 24 large corporations that promote themselves as environmental champions, their supply chain emissions would only decrease by 15% by that time or 21% under the most optimistic reading of their plans.
That is a significant result from the second annual Corporate Climate Responsibility Monitor, published on Monday by the New Climate Institute and Carbon Market Watch.
Co-author of the paper Thomas Day of the New Climate Institute stated in a press release that firms’ existing plans do not reflect the necessary urgency for emission reductions in this decade that is crucial for climate action.
The integrity of business carbon reduction programs up to 2030 must get renewed and urgent attention from regulators, voluntary efforts, and enterprises. The discussion about longer-term net zero should not take focus away from the current objective.
Together, the 24 multinational firms examined in the paper contributed around 4% of the greenhouse gas emissions produced worldwide in 2019. Among them are the multinational shipping company Maersk, the food and beverage producers PepsiCo and Nestle, the retailers H&M Group and Fast Retailing (Uniqlo), and the technology giants Apple, Google, and Microsoft.
As part of a project associated with the UN-backed Race to Zero campaign, all of these corporations have committed to reducing their emissions in order to keep global warming to 1.5 degrees.
The investigation, however, showed that many of them are indeed taking their time. The research deemed 15 of the 24 corporations’ climate initiatives to have low or very poor integrity.
According to Carbon Market Watch’s Executive Director Sabine Franks, many businesses are using ambiguous and deceptive net zero pledges to greenwash their brands while carrying on as usual. This is happening at a time when businesses need to be transparent about their impact on the environment and reduce their carbon footprint.
The Study Identified Three Significant Issues with Corporate Climate Plans:
- Missing the deadline: While 22 companies had set 2030 targets, these targets were not nearly ambitious enough to match the emissions reductions needed by that date. This was partly because many of the near-term targets only focused on emissions from the company’s direct activities or energy sourcing, otherwise known as scope 1 and 2 emissions. This excludes all indirect, or scope 3 emissions, such as emissions from the use of a company s product. But these emissions made up more than 90 percent of most companies’ footprints.
- Shallow Pledges: Many of the company’s net zero pledges were ambiguous and not actually in line with deep decarbonization. Only five companies H&M Group, Holcim, Stellantis, Maersk, and ThyssenKrupp actually had plans to cut emissions by at least 90 percent by their net-zero target date. In total, all 24 plans would only see the companies combined emissions fall by 36 percent by the so-called net-zero deadline.
- Offending Offsets: Many of the company’s plans still relied too heavily on carbon offsets, which have been repeatedly shown to be unreliable. At least 75 percent of the companies relied on offsets based on preserving forests or other natural carbon sinks. However, by their living nature, these projects can t guarantee long-term carbon storage, and sufficiently canceling out emissions this way would require two to four planet Earth if other companies were to follow suit.
According to a press release from Carbon Market Watch, Lindsay Otis, a policy expert on carbon markets, these companies are misleading investors and consumers by making absurd claims about their carbon neutrality.
They are also putting themselves at greater risk of legal trouble and damage to their reputations. Instead, they should put aggressive climate strategies into action to cut their own emissions and finance initiatives that are not related to their own operations, all without claiming to be carbon neutral
Maersk, with a plan of reasonable integrity and some assistance from its investments in alternative fuels and ships, fared the best on an individual basis. On the other end of the scale, plans of poor or very low integrity were held by American Airlines, Samsung, Carrefour, Deutsche Post DHL, Fast Retailing (Uniqlo), Inditex (Zara), Nestle, PepsiCo, Volkswagen, and Walmart.
Nestl defended its climate goals in response to the report by claiming that it had followed the Science-Based Targets Initiative (SBTi) standard.
The New Climate Institute (NCI) and the Science-Based Targets Initiative (SBTi), two reputable organizations, plainly disagree on the strategy businesses should employ to achieve net zero emissions, according to the company’s statement. This is problematic because businesses need precise, general guidelines to build their strategy on given the gravity and urgency of addressing climate change.
According to The Wall Street Journal, the report does include some recommendations on what businesses should do. Additionally, they can try their best to quantify and report scope 1, 2, and 3 emissions, assist their suppliers in becoming more sustainable and ensure that they are using 24/7 renewable energy in addition to ensuring that their net-zero plans do cover at least 90% of total emissions.