- Two dozen large global companies are failing to live up to their commitment to lead the fight against climate change and achieve “net zero” greenhouse gas emissions, according to the second annual Corporate Climate Responsibility Monitor. “The companies are hiding their climate inaction behind the fig leaf of green-sounding ‘net zero’ plans.”
- Based on their current practices, the 24 companies by 2050 would reduce their current emissions by 36% rather than the 90% to 95% required to meet their pledges, according to the CCRM report. The companies generate more than $3 trillion in total revenue and are responsible for about 4% of global emissions.
- “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 brand while continuing with business as usual,” Carbon Market Watch Executive Director Sabine Frank said in a statement. “Since multinationals have both an oversized impact on the planet and the means to reduce their carbon footprint, they must take real action to clean up their act and not just their image by slashing their emissions.”
The CCRM report aligns with a finding by CDP, a platform for environmental disclosure, that only 81 of 4,000 companies worldwide that have committed to a climate transition plan disclose details about scenario analysis, financial planning, board oversight, policy engagement and 17 other indicators of credible plan execution.
Thirteen percent of the companies publicize 14 to 20 of the indicators, “demonstrating that they are on their way to disclosing a credible transition plan,” according to CDP, which studied disclosure across 13 industries in 135 countries. “Companies are recognizing the need for climate transition plans but are not moving fast enough amidst incoming mandatory disclosure.”
More than a third of companies provide sufficient disclosure on the risks and opportunities from a climate transition plan but only 3% provide relevant, forward-looking financial details supporting their plan, CDP said.
Both reports coincide with a call to reduce climate change from regulators, non-profits, international organizations and other stakeholders worldwide.
“We are flirting with climate disaster,” UN Secretary General António Guterres said last month at Davos, Switzerland. “Greenhouse gas emissions are at record levels and growing,” pushing up global warming toward 2.8 degrees Celsius, well above the 1.5 C target.
“Our climate goals need the full engagement of the private sector,” Guterres said.
Not all large, global businesses have failed to make credible progress in meeting their net-zero commitments, according to the CCRM report, a project by CMW and the NewClimate Institute.
Apple, Walmart, Foxconn and H&M Group help their suppliers buy renewable electricity through either guidance or by helping arrange such purchases, according to the CCRM report.
Google and Microsoft have pledged that by 2030 all of their energy consumption will be matched around the clock with renewable energy generation at nearby installations.
Five companies – H&M Group, Holcim, Stellantis, Maersk and Thyssenkrupp – have plans to reduce their GHG emissions by 90% by their target date, commonly 2040 or 2050, according to the CCRM report. This includes Scope 3 emissions by suppliers and vendors across their supply chains.
At the same time, the CCRM report said, “we find the long-term targets of 17 companies to be of poor integrity, due to the inadequacy or complete lack of explicit emission reduction commitments alongside ambiguous net-zero pledges.”