- World’s largest and wealthiest corporations are failing to deliver on their climate pledges.
- Carbon Market Watch and NewClimate Institute conducted extensive research into businesses.
- Many companies are exploiting vague and misleading ‘net zero’ pledges to greenwash their brands.
According to an in-depth investigation released Monday, the world’s largest and wealthiest corporations are failing to deliver on their climate pledges, prompting governments to tighten down on corporate greenwashing.
Companies are rushing to implement measures to minimize the carbon emissions of their operations, as well as their products and services, under increasing pressure from shareholders, governments, and customers.
Twenty-four major corporations studied have all embraced the Paris treaty goal of limiting global warming to 1.5 degrees Celsius and have aligned themselves with UN-backed campaigns to ensure that industry plays a role in decarbonizing the global economy.
According to the UN’s IPCC science advisory group, staying below that critical temperature barrier will need cutting global greenhouse gas emissions by 45 percent by 2030 and reaching “net zero” – with any residual emissions matched by removals – by mid-century.
However, the analysis concluded that the 22 corporations’ 2030 targets would only reduce their total emissions by 15%.
And, if all 24 multinationals’ net zero commitments are satisfied, they will only reduce around a third of their present emissions.
“The overwhelming majority of these corporations are simply not delivering the goods they promised,” the 2023 Corporate Climate Responsibility Monitor concluded.
Carbon Market Watch and NewClimate Institute conducted extensive research into businesses ranging from automobiles, shipping, and aviation to retail fashion, high technology, and food, as well as steel and cement. There were no oil or gas firms included.
Vague ‘net zero’ pledges
With combined earnings of more than $3 trillion, the two dozen corporations under scrutiny account for around 4% of total world emissions — two billion tonnes of CO2 or its equivalent per year.
Analysts evaluated the credibility of each corporation’s climate plan, examining the accuracy of self-reported emissions, objectives set for decreasing them, progress to date, and the extent to which pledges rely on questionable compensation schemes known as carbon offsets.
“At a time when corporations need to come clean about their climate impact and shrink their carbon footprint, many are exploiting vague and misleading ‘net zero’ pledges to greenwash their brands while continuing with business as usual,” said Carbon Market Watch executive director Sabine Frank.
Earning the best overall grades was shipping company Maersk, whose plan for eradicating its carbon footprint by 2040 was found to have “reasonable integrity”.
Eight multinational titans, including Apple, Google, Microsoft, and steel major ArcelorMittal, were determined to have “moderate integrity” in their climate strategies.
H&M, a Swedish fast-fashion retail company, has very aggressive carbon reduction targets, but portions of its green approach could harm them, according to the analysis.
“The company’s plans to switch to biomass and renewable electricity credits (RECs) in the supply chain could severely undermine those targets,” NewClimate Institutes’s Silke Mooldijk told.
Biomass is associated with deforestation and CO2 emissions, and the purchase of RECs “allows companies to report emission reductions that are not real,” according to a recent study in Nature Climate Change.
Junk carbon credits
When asked to comment, H&M “welcomed” the new report and outlined steps it is taking to achieve its “100 percent renewable electricity goal for our and our supplier’s operations”, but sidestepped the question of biomass and RECs.
The climate claims of another 11 companies were found to have “low integrity,” and four — American Airlines, Samsung Electronics, retail food giant Carrefour, and JBS, the largest meat processing company in the world — were all tagged with “very low integrity”.
Carrefour objected to the ranking, claiming that the company had set emissions reduction goals across its whole value chain and was the only significant French food retailer willing to cut off suppliers who did not have their own climate strategy in place.
JBS stated that the study did not take into consideration written clarifications offered to the authors, but did not specify what those clarifications were.
When contacted via email, American Airlines and Samsung both responded.
“Regulations are needed requiring companies to reduce their emissions, and regulating what they can — and cannot — say to consumers,” Carbon Market Watch policy lead Gilles Dufrasne told.
“The short-term action that’s needed is to ban carbon neutrality claims,” he added. “If the company wants to buy junk carbon credits that don’t represent anything, they’re free to do so, but they’re not free to make false and misleading statements.”
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