Companies Aren't Acting on Net-Zero Pledges
As the US Securities and Exchange Commission considers new regulations on climate risk disclosure, a new study shows too few corporations are taking meaningful action to actually reduce harmful emissions and meet net-zero pledges. Conducted by the nonprofit As You Sow, the study assessed 55 of the largest US corporations' climate targets and found "the overwhelming majority of companies" don't have ambitious enough climate pledges, and aren't taking steps to reduce their emissions and hit net-zero targets.
The report rated companies in three key areas: disclosures they've made about emissions, their emissions reduction targets, and actual emissions reductions. Only three (Microsoft, PepsiCo, and Ecolab) received an A grade. The report used the Paris Agreement's 1.5-degree target as their benchmark, which requires hitting net-zero emissions by midcentury.
"Part of the problem is a lack of ambition," Danielle Fugere, president and chief counsel at As You Sow, told Fast Company. "If you don't set ambitious targets, if every decision in your organization is not geared toward achieving net-zero targets, you will make insufficient progress."
Why This Matters
In order to avoid the worst impacts of climate change, it's imperative to ramp down emissions. Carbon offsets and credits won't cut it: businesses will have to make changes to their supply chains and in-house processes. Hitting net-zero in the next 28 years means reducing absolute emissions at a rate of 4.2% or more per year. Corporations are a significant piece of the emissions puzzle: a study earlier this year of 25 large companies also concluded they are coming up short on their climate promises -- and that they collectively accounted for about 5% of global greenhouse gas emissions in 2020.
NBC: Are Major Companies Living Up To Their Net-Zero Pledges To Combat Climate Change?, February 10, 2022.
Reuters: 2021 saw jump in greenhouse-gas emissions, says report, January 10, 2022.
Companies' Climate Impact Disclosures Not Enough
Honing in on the first category of the As You Sow report, Reuters analyzed climate change data self-reported by corporations to the nonprofit environmental disclosure platform CDP. Only 1% of the more than 13,000 companies disclose all 24 pieces of information necessary to determine if their climate plans are actually credible. Meanwhile, 30% of those companies saying they have a climate plan haven't provided any data to prove they're making good on their promises. The transport and apparel sectors were the worst offenders, with less than 0.3% of companies reporting all indicators.
Our Eden: Your Bank is Funding Climate Change, November 13, 2021.
WW0: COP26 Talks - WWF's Carter Roberts x Pepsi CEO Ramon Laguarta, November 3, 2021.