Net-Zero Commitments of Most Mega-Corporations Are Hollow, Report Says
In the wake of COP26, much ink has been spilled about how mega-corporations, under pressure from environmentally conscious consumers and shareholders, are stepping in by pledging to become fully carbon neutral within a few years. or decades.
Yet a shocking new study of 25 mega-corporations, released this month by the NewClimate Institute and Climate Market Watch, reveals that much of this is smoke and mirrors. In fact, the researchers conclude that in reality, the emissions reduction strategies of these companies, with a combined revenue of more than $3 trillion and a greenhouse gas footprint equivalent to 5% of the total worldwide, represent only a 40% reduction rather than the 100% restoration implied by “net zero”. Also worryingly, by 2030, the reductions would amount to only 23% compared to 2019.
Additionally, many of the promises involve somewhat nebulous “offsets,” an accounting trick that allows a company to plant trees or implement other carbon sequestration strategies instead of reducing emissions. Yet, as the report’s authors point out, to get closer to net zero, companies cannot play one or the other: instead, they must both implement offsets and, in at the same time, reduce emissions.
Behemoths like Amazon, Google, Ikea and Walmart were all rated in the report as having “low integrity” when it comes to their net zero promises. Others, including Nestlé, Unilever and the BMW Group, have received the moniker of “very low integrity” for their publicly stated efforts.
In some cases, these low marks were due to obvious failures; in others, companies simply did not provide enough data to properly analyze their goals. In the introduction to the report, the authors wrote that “it is harder than ever to distinguish between real climate leadership and unsubstantiated greenwashing.”
But what is clear from the report is that the unsubstantiated greenwashing side of the equation is, unfortunately, all too common. Companies seem much more concerned with appearing to implement major green efforts than actually working fundamentally and urgently to roll back the climate change crisis.
One of the practices companies use to make their efforts look better than they actually are is to compare current and future emissions levels to abnormally high baseline years, so that what is actually regular annual emissions seems rather to be a decrease in emissions. GHGs [Greenhouse Gas] The protocol defines three main types of emissions. Scope 1 emissions are direct emissions from company ownership; scope 2 corresponds to indirect emissions related to the purchase of electricity, heating, steam production, etc. ; and scope 3 are all other emissions associated with a company’s activities, such as distribution of a company’s product, packaging of goods, business travel, emissions associated with end-of-life waste a product, etc.
Scope 3, in particular, has proven to be an area where large companies can manipulate data to make themselves look better on the environment than they actually are. “For example,” the authors write on page 20 of their 127-page report, “CVS Health Scope 3 emissions are 70-80% higher in 2019 than in 2017, 2018, and 2020, with no clear explanation , which could undermine the meaning of the company’s goal of a 47% reduction in Scope 3 emissions by 2030 compared to 2019.” This is a strategy similar to dodging tax the Trump Organization is accused of, whereby the company allegedly inflated the value of its properties when trying to obtain loans and then deflated the values when paying property taxes.
In this same section, the authors note that Unilever claims emission reductions for its soaps and detergents business by taking credit for more energy-efficient water heating systems for customers who wash their hands. hands with company soap and the use of more renewable electricity. -generation sources to run washing machines that use the company’s detergent.
At least 7 of the 25 companies the research focused on were so selective about emissions that they considered the report concluded they could hide up to 98% of their actual emissions footprint, making their public promises little more than absurd. Other companies have camouflaged “upstream” and “downstream” emissions – upstream emissions being linked to the production of goods and downstream emissions being associated with the consumption of those goods – including energy sales and day-to-day operations of their stores, from easy identification. In some cases, they only mentioned them in the footnotes of their report – and this despite the fact that the vast majority of their carbon emissions come from these sources. Still others sold off parts of their carbon-intensive operations to subsidiaries and then reported lower emissions, even though in reality they had simply shifted emissions from one set of operations to another. .
The embezzlement continues from kingdom to kingdom. In many cases, it seems, the commitment to net zero is accompanied by no specific emission reduction targets on an annual basis, making the pledge little more than a feel-good joke. “12 of the companies with (net) zero emissions targets made no specific commitment to reducing their own emissions in the net zero target year,” the authors write. These included Amazon, which the authors lambasted for committing to net zero but not actually offering “everything [greenhouse gas] emission reduction target. A similar lack of specificity accompanied BMW’s net zero commitment.
Committing to net zero is the easy part. Getting there, and reshaping supply chains to ensure that at all stages of the production and distribution process, greenhouse gases are actually reduced significantly, is the hardest part. The world’s largest companies are perfecting the art of green spinning. But, as this report shows, with catastrophic climate change now a looming reality, it’s high time for them to go beyond the pirouette and ensure their public commitments are met over the next few years. .