Climate Week NYC: Climate Action and Commitments of the Fortune Global 500
There's been a three-fold increase in climate targets by Fortune Global 500 companies over the past three years, but more than 60% still don't have any commitments on the books. That's according to numbers from Natural Capital Partners, who led a discussion with leaders from some of the companies out front on those pledges as part of New York's Climate Week. The panel highlighted actions beyond carbon pledges including:
- Microsoft emphasized the importance of a company's entire supply chain, which its own plan to be carbon negative by 2030 takes into account.
- HP touted their end-of-decade goal to hit 75% circularity (a loop of reusing and recycling instead of creating then trashing) for their products and packaging.
- Aviva, the British insurance company, brought up the importance of making sure pensions and investments aren't generating profit for climate-damaging organizations.
Natural Capital Partners: Reality check - climate action and commitments of the Fortune Global 500, September 22, 2021.
Why This Matters
Large companies have the opportunity to set standards for smaller companies that are part of their production process. The Fortune Global 500 combined have $33 trillion in revenues and employ 70 million people around the world. They can also be a part of more systemic change. For example, a study done by Aviva found it was 21 times more effective for organizations to switch pensions to sustainable funds than to do every other individual lifestyle change, like not driving a car with a combustion engine or switching to a vegetarian diet.
But it's also important to hold companies accountable to their pledges. Research earlier this year found that less than a quarter of the world's large public companies are on track to meet the Paris Agreement goals by 2050.
Limits of Corporate Action
While corporate pledges are a first step, action is what matters. And not all pledges are created -- and translated into actionable steps -- equally.
Companies can make a climate pledge that generates a positive reaction but doesn't require them to change much about how they operate. As Elizabeth Willmott, Microsoft's Carbon Program Director put it, "I'm concerned about the muddiness in definitions."
These pledges and actions also don't exist in a vacuum from politics. For Microsoft specifically, which has led the way with its own climate pledges and transparency, the company's donations to climate-denying Republicans like Senator Roy Blunt seem especially out of sync. As Heated wrote earlier this year:
In the most important way, however, Microsoft is like every other big corporation on climate change. It will use its vast resources to change its own emissions trajectory, but it will take little responsibility for changing the trajectory of US politics. That's unfortunate, because we live in a country where corporations have outsized control over policy.