In an era where the urgency to combat climate change is greater than ever, major global corporations have positioned themselves as champions of sustainability, making bold claims of achieving "net zero" emissions and portraying themselves as leaders in the fight against climate change. However, a closer look reveals that many of these companies are hiding their inaction behind the façade of green-sounding plans. The 2023 edition of the Corporate Climate Responsibility Monitor (CCRM), a joint initiative by the NewClimate Institute and Carbon Market Watch, has shed light on the lack of integrity and transparency in the climate commitments of these corporations.
The Illusion of Net Zero Pledges
Despite their lofty net zero targets, the majority of the 24 assessed corporations fail to deliver on their promises. The CCRM report highlights that none of the companies' climate plans received a 'high integrity' score, with only one company, Maersk, achieving a 'reasonable integrity' ranking. Apple, ArcelorMittal, Google, H&M Group, Holcim, Microsoft, Stellantis, and Thyssenkrupp managed to secure a 'moderate integrity' score, while the remaining companies fell into the 'low' to 'very low' integrity range.
When examining the medium-term targets set by these corporations, the picture becomes even bleaker. Despite the urgent need for substantial emission reductions to limit global temperature increases to 1.5°C, the 22 companies with a 2030 target commit to a mere median reduction of 15% in their real emissions by 2030. Looking further ahead to 2050, the net-zero pledges of the 24 corporations only amount to a meager 36% reduction, far from the 90-95% reduction required to align with the goals of the Paris Agreement.
The Pitfalls of Offsetting and Insetting
To exacerbate the issue, many corporations rely on offsetting and insetting to neutralize their emissions. Three-quarters of the assessed companies plan to offset a significant portion of their emissions using carbon credits from forestry and other land use projects. However, these solutions only provide temporary carbon storage and are susceptible to reversals, making them an unreliable means of achieving genuine emission reductions. Furthermore, the widespread adoption of offsetting practices would require a second planet Earth to absorb global emissions, underscoring the inherent limitations of this approach.
Another concerning trend is the emergence of "insetting," which allows companies to claim emission reductions within their own value chains without proper checks and balances. This vague concept further undermines the credibility of companies' climate commitments, as it fails to address the need for broader systemic changes.
The Urgent Need for Regulation
The prevalence of corporate greenwashing and the misleading nature of net zero and carbon neutrality claims have far-reaching consequences for both the climate and society. These disingenuous claims create an illusion of significant action while deflecting responsibility onto future generations and obscuring the urgent need for immediate and substantial emission reductions.
To address this issue, governments must take decisive action and regulate the use of misleading terms and claims in companies' communications. Carbon Market Watch, in collaboration with other NGOs, has put forward a set of recommendations calling for a complete prohibition on all claims of climate or environment-related neutrality, including variations like "carbon neutral," "CO2 neutral," "CO2 compensated," "climate positive," and "net zero." Such a ban would protect consumers from deceptive advertising practices and incentivize companies to prioritize genuine emission reductions over superficial greenwashing.
The European Union has a unique opportunity to lead the way in combating corporate greenwashing by implementing robust regulations. As the EU updates its consumer protection legislation, policymakers must seize this chance to enact comprehensive measures that put an end to misleading claims. Carbon Market Watch and other NGOs are urging EU institutions to adopt an airtight ban on climate- and environment-related neutrality claims, setting a precedent for other governments to follow.
Leading by Example: Promising Climate Actions
While the overall performance of the assessed corporations falls short of expectations, a few companies have demonstrated leadership in specific areas of climate action. H&M, Maersk, and Stellantis have made credible commitments to deep decarbonization in the longer term. Google is pioneering innovative tools to procure high-quality renewable energy in real-time, setting an example for others to follow. Similarly, DHL is investing in the electrification of its fleet and the production of low-carbon fuel, showcasing its commitment to reducing emissions in the transport and logistics sector.
These positive examples highlight the potential for companies to replicate and scale up best practices. However, it is crucial for all corporations to step up their efforts and embrace the reality of a changing planet. Superficial targets and vague commitments will not suffice in the face of the climate crisis. Genuine action, accompanied by transparent reporting and accountability, is essential to drive the necessary transformation towards a sustainable future.
Conclusion: Unveiling the Truth Behind Corporate Sustainability Commitments
The 2023 edition of the Corporate Climate Responsibility Monitor reveals the stark reality behind the net zero claims of major corporations. While these companies portray themselves as leaders in sustainability, many are hiding their inaction behind green-sounding plans and misleading pledges. The lack of integrity and transparency in their climate commitments necessitates urgent regulatory intervention to protect consumers and the environment.
Governments have a crucial role to play in banning misleading terms and claims, while corporations must prioritize genuine emission reductions over superficial greenwashing. The time for procrastination and deceptive advertising is over. Only through genuine action and a commitment to slashing emissions can companies make a meaningful contribution to addressing the climate crisis and securing a sustainable future for all. It is time to unveil the truth behind corporate sustainability commitments and hold companies accountable for their actions.