Zero credibility

Corporations want the public to know that they take the climate crisis seriously. Most major corporations have taken a public "climate pledge," promising to reach "net zero" carbon emissions by a future date. Amazon is so into this concept that it started "The Climate Pledge" in 2019, encouraging other companies to pledge to reach net zero carbon emissions by 2040. Amazon even bought the naming rights to the home of the NHL's Seattle Kraken and called it "Climate Pledge Arena." 

As a concept, climate pledges are appealing. The climate scientists who produce the Intergovernmental Panel on Climate Change (IPCC) report have made clear that the world needs to stop adding CO2 to the atmosphere sooner than later. Between 1850 and 2019, approximately 2,390 gigatons of CO2 were emitted worldwide. That warmed the planet by about 1.1 degrees Celsius. Every ton of CO2 emitted contributes to more warming.

To keep global warming under 1.5 degrees Celsius, which is necessary to avoid many of the worst impacts, the IPCC says the world can emit about 400 more gigatons of CO2 in total.  To avoid more than 2 degrees Celsius in warming that carbon budget increases to around 1,150 more gigatons. In either scenario, there is no "sustainable" rate of CO2 emissions. By pledging to reach "net zero" emissions by 2040 or earlier, corporations are aligning their companies with science.

But it's easy to make a pledge to reach "net zero." It's much harder to create a credible plan to reach that goal and then execute that plan. Beyond mere pledges, are these companies demonstrating real leadership on climate issues by taking meaningful action?

The NewClimate Institute recently released a report that evaluates the climate pledges of 25 multinational corporations. The results are not encouraging. Specifically, while all 25 companies have pledged to reach "net zero," they've collectively made specific commitments to reduce just 20% of their current carbon footprint by 2040. 12 of the 25 companies have made no specific carbon emissions reductions whatsoever. 

The companies all claim their plans are consistent with policies to cap global warming at 1.5 degrees Celsius but their plans contain "subtle details and loopholes" that undermine these claims. Many companies rely on dubious carbon offsets or "renewable energy certificates" that do not actually contribute to carbon emissions reductions. 

Nestlé, for example, claims that it "will halve our greenhouse gas emissions by 2030 and reach net zero by 2050." But its plan received very poor marks from the NewClimate Institute. Nestlé's net zero by 2050 pledge includes "no defined target for own emission reductions." The company further states it wants to remove 13 metric tons of carbon from the atmosphere by 2030 "but does not specify how." The NewClimate Institute report estimates that the plan will only reduce Nestlé's emissions by 18% by 2030. Nestlé's plan is rated "very low" for transparency and integrity. 

"We welcome scrutiny of our actions and commitments on climate change. However, the NewClimate Institute's Corporate Climate Responsibility Monitor (CCRM) report lacks understanding of our approach and contains significant inaccuracies," Nestle told the BBC, without elaborating. 

Amazon, despite founding The Climate Pledge, fares only slightly better. The NewClimate Institute report notes that its pledge to achieve net zero emissions by 2040 "remains unsubstantiated without any explicit reduction target for the company’s own emissions." (In 2020, Amazon's carbon emissions grew by 19%.) Amazon is aggressively seeking to decarbonize its energy use, acquiring fleets of electric vehicles and procuring large amounts of energy from renewable sources. But it provides little details on "Scope 3" emissions, which includes emissions from the goods sold by Amazon. Amazon's plan is rated "low" for transparency and integrity. Amazon did not provide a substantive response to these criticisms. 

Apple is one of the highest-scoring companies evaluated by the NewClimate Institution. But its plan still has issues. "We’re carbon neutral. And by 2030, every product you love will be too," Apple's website claims. But Apple's products account for 98.5% of its CO2 emissions. While Apple claims it will be net zero by 2030, the plan only aims to achieve "a 62% emission reduction." That is admirable, but not net zero. Apple's plan is rated "reasonable" for transparency and "moderate" for integrity. The company "did not respond directly to the report but told BBC News it has a plan to reduce its carbon footprint." 

None of the 25 companies were rated "high" for transparency or integrity. Responding effectively to the climate crisis will require both. 

Other major companies receive low ratings

Many other major companies received low ratings from the NewClimate Institute. Google, which pledged to be carbon-free by 2030, received a “low” rating for both transparency and integrity. In 2020, Google announced that it has been “carbon neutral since 2007” and aimed to “run all of its data [centers] and offices on carbon-free energy by 2030.” Sundar Pichai, CEO of Google's parent company Alphabet, said that “Google’s pledge to be using only carbon-free energy by 2030 was its ‘biggest sustainability moonshot yet.’” 

According to the report, “Google’s plans for the decarbonization of its electricity-related emissions are comprehensive and innovative, but it is unclear if the targets and measures for other emission sources are sufficient.” The report explains that “[t]he carbon neutrality claim is derived through the procurement of renewable energy and offset credits, and covers only selected emission scopes.” This allowed Google to omit 60% of the company’s greenhouse gas emissions in 2020 due to the emissions being categorized as major scope 3 emission sources.

In response to the NewClimate Institute report, Google told BBC News, “We clearly define the scope of our climate commitments and regularly report on our progress in our annual Environmental Report, where our energy and greenhouse gas emissions data is assured by Ernst & Young.”

Unilever received one of the lowest ratings from the NewClimate Institute, with a “low” transparency rating and a “very low” integrity rating. 

In 2020, Unilever “committed to achieve company-wide net zero emissions by 2039,” but the report argues that while the net zero target by 2039 “covers all emission scopes” it “is not substantiated with specific emission reduction targets for its major emission sources.” Despite also outlining a “wide array of policies” aimed to reduce emissions, Unilever “has not achieved significant reductions in the emission intensity of its products.” 

Unilever responded to the report by telling BBC News: “While we share different perspectives on some elements of this report, we welcome external analysis of our progress and have begun a productive dialogue with the NewClimate Institute to see how we can meaningfully evolve our approach.” 

Other major companies that received low ratings include Walmart, JBS Foods, Deutsche Post DHL, CVS Health, Volkswagen, GlaxoSmithKline, BMW, and Ikea. 

Validators and standard setters funded by corporations

One nonprofit group, RMI, has been quoted in the media defending these corporations' plans to reach carbon zero. But RMI receives significant funding from some of the same corporations it's defending. 

In the Washington Post, an article on the study quotes Sarah Ladislaw, managing director at RMI. According to Ladislaw, “many companies are taking on new challenges they genuinely haven’t solved before.” Executing a plan to reach net zero emissions will take time, she argues.

But the article fails to mention that at least two of the companies highlighted in the NewClimate Insitute’s report are major donors to RMI. Google and IKEA are labeled as “Heroes” in the RMI 2020-2021 Annual Report, contributing at least one million dollars. RMI also received more than $1,000,000 from the Bezos Earth Fund, a charity controlled by Amazon founder Jeff Bezos.

Some companies attempt to defend themselves by noting that their net zero plans were approved by the Science-Based Targets initiative (SBTi). But as the NewClimate Institute study points out these “standard-setting initiatives are lending credibility to low quality and misleading targets.” The report argues that most of the companies with SBTi-approved targets have “highly contentious” or even inaccurate targets due to loopholes and technicalities. 

SBTi is also funded by major corporations. Amazon and IKEA are listed as providing “core funding.” Other corporate funders listed on SBTi’s website and featured in the NewClimate Institute report include BMW Group and Deutsche Post DHL.

Banks pledge net zero emissions while also pumping money into oil and gas production

Many major banks are also publicly releasing net zero emission pledges while quietly “pumping billions into new oil and gas production.” According to a report by ShareAction, “HSBC put an estimated $8.7 [billion] into new oil and gas in 2021, while Barclays put in $4.5 [billion], and Deutsche Bank loaned $5.7 [billion].” 

Each of these banks are members of the United Nations-led group called the Net Zero Banking Alliance, which “brings together banks worldwide” that “are committed to aligning their lending and investment portfolios with net zero emissions by 2050.” The Net Zero Banking Alliance, which represents “over 40 [percent] of global banking assets,” combines “near-term action with accountability” to help members set “an intermediate target for 2030 or sooner, using robust, science-based guidelines.” 

ShareAction estimates that, since joining the Net Zero Banking Alliance last year, “24 big banks have provided $33 [billion] for new oil and gas projects, with more than half of that amount ($19 [billion]) coming from four of the grounding members — HSBC, Barclays, BNP Paribas[,] and Deutsche Bank.”