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Global corporate climate pledges are ‘misleading’, not credible

Global companies like Amazon and Mercedes-Benz want us to believe they are serious about fighting global warming. But independent analysts say their climate commitments cannot be taken at face value.

The climate pledges of 24 of the world’s self-proclaimed biggest green companies are ‘misleading’ and ‘wholly insufficient’ to prevent global temperatures from rising above 1.5 degrees Celsius (2.7 degrees Fahrenheit), according to a searing report released Monday by the NewClimate Institute and Carbon Market Watch, two European environmental organizations. These two dozen companies have pledged to be carbon neutral by 2050, but their cumulative pledges only cover 36% of their total greenhouse gas emissions – largely due to their reliance on false carbon offsets or their inability to address huge chunks of their supply chain emissions. For 17 of the companies, the authors pointed to an “insufficiency or complete absence” of actual plans to justify their net zero promises.

The companies are engaging in an “aggressive communications campaign” to declare they will be net zero, Gilles Dufrasne, head of Carbon Market Watch on global carbon markets, said during a press briefing last week. “But that’s just not what they promise. … I would call this greenwashing.

The authors of the report examined the climate commitments of some of the largest international companies that are part of the Race to zero campaign, a global initiative that commits institutions to a credible path to limit global warming to 1.5°C. The researchers identified eight of the world’s most polluting sectors, including automotive, electronics and fashion retail, and selected three companies from each sector. These companies talk openly about their decarbonization commitments, which they sometimes advertise prominently.

Overall, the report paints a bleak picture of corporate climate responsibility. It revealed that 15 of the 24 corporate climate commitments were of “low or very low integrity”, eight of “moderate integrity” and zero of “high integrity”, based on a series of factors such as their commitment to long-term emissions reductions. Several promises, including those of Amazon and American Airlines, rely on misleading carbon credits tied to forests that are unlikely to sequester carbon for more than a few years. Others, like a 2040 carbon neutrality pledge from French grocery giant Carrefour, simply omit so-called scope 3 emissions – emissions from the products companies sell to customers. These emissions can represent more than 90 percent of a company’s climate pollution (98%, in the case of Carrefour).

figure comparing companies' promises to what they actually promise to do
Analysis by the NewClimate Institute and Carbon Market Watch indicates that companies’ climate commitments “do not match what their promises might suggest”.
NewClimate Institute

Companies in some of the most polluting sectors – such as automaker Volkswagen and meat giant JBS – had no credible plans to change their business models or diversify away from activities that are inherently high-intensity. of emissions. Others, including PepsiCo and Nestlé, have created hype around a practice called “insetting,” which involves offsetting emissions from their supply chains. (For example, a company could shut down one of its factories and claim that it cancels the emissions of another.) The NewClimate Institute and Carbon Market Watch have said this is an “illegitimate” concept, and yet worse regulated than most offsets.

Only one company – shipping giant Maersk – had a pledge deemed to be of “reasonable integrity”, as it was one of the few whose net zero target covered 90% or more of its overall emissions footprint. . Pledges by fast fashion company H&M, automaker Stellantis, and cement and concrete maker Holcim also covered 90% or more of their carbon emissions, but those pledges performed less well on transparency or of reliability.

Twelve of the companies named in the report responded to Grist’s requests for comment. H&M, Mercedes-Benz and Volkswagen said they welcomed the report for recognizing their sustainability initiatives and, along with Amazon, Ahold Delhaize, Foxconn, Samsung and Thyssenkrupp, reaffirmed their previously stated carbon neutrality goals. Walmart and Carrefour disagreed with the report’s methodology and said it misrepresented their emissions targets. Microsoft and Stellantis declined to comment.

Thomas Day, an expert on carbon markets and corporate climate action for the NewClimate Institute and co-author of the analysis, stressed the importance of carefully considering companies’ short-term emissions pledges, including many have been “inappropriately” certified by third-party organizations. . Almost all of the 24 companies analyzed by the NewClimate Institute have emission reduction targets for 2030, and 16 of them have been certified by the Science-Based Targets Initiativeor SBTi – a widely respected certifying body whose stamp of approval lends legitimacy to private sector climate commitments – but their pledges only cover a median of around 15% of their total climate pollution between 2019 and 2030. This contrasts with the world of emission reductions of 43 and 48%, respectively, which the Intergovernmental Panel on Climate Change says are needed in this time frame to keep temperatures from rising above 1.5° vs.

The Mercedes-Benz star against a cloudy sky
Mercedes-Benz headquarters in Stuttgart, Germany. Marijan Murat/Picture Alliance via Getty Images

“These companies may be members of voluntary initiatives, but almost all of the companies that make these commitments do so in response to pressure from consumers and investors,” Day said. “They are arguing to regulators that they don’t need to be regulated.”

In response to Grist’s request for comment, SBTi linked to a seven-page technical statement explaining some differences between how it assesses companies’ net zero commitments and the report’s methodology, including different definitions of carbon offsets.

NewClimate Institute analyst Eduardo Posada said the report made clear the need for greater clarity and enforcement of existing consumer protection laws, as well as new rules to keep up with the changing world. rapid corporate greenwashing. As with foods that are certified as “organic,” he said, decarbonization claims should be required to meet a list of criteria to prove they aren’t just empty words. The European Union is currently considering a repression of greenwashingand federal agencies in the United States are tightening regulations on emissions disclosures And misleading environmental marketing claims.

Posada endorsed a complete ban on terms like “carbon neutral” and “net zero” in ads because they open the door to ambiguity and questionable carbon offsets. “The terminology is inherently misleading” and risks being misunderstood by the public, he told Grist. “’Zero’ is OK because it means full or nearly full decarbonization, but ‘net’ is where all the tricks go. Companies can do a lot of things inside this word “net”.

“We think it would be more constructive, more helpful if companies actually committed to reductions instead of these slogans,” he added.

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