When net zero is not enough

A new analysis finds major multinationals including Unilever, Nestlé, Accenture and BMW have ‘very low integrity’ to their plans to cut emissions, meaning that accounting techniques take precedence over radical action – the findings from the Corporate Climate Responsibility Monitor come at a time of increased climate awareness and fears of greenwashing.

Why it matters

The world needs radical action to cut emissions now. While most companies now realise they must act, it is also critical that they be held accountable to their claims and that workarounds are simply not enough.

Should they continue to do so, the scepticism surrounding green claims will only grow, with the potential to damage the strong leadership position that business has built up.

Regulators are increasingly interested in greenwashing claims, and specificity and honesty is not only a wise move to avoid trouble but to build integrity.

The research

Exploring the climate pledges of 25 of the world’s largest firms, the Corporate Climate Responsibility Monitor, the first of an annual publication, explores their headline climate pledges and scores them on whether they are high to very low integrity.

Shockingly, none scored above reasonable integrity, with only one firm’s claim – Maersk’s – judged reasonable. While there are a handful of moderates, the analysis spells out the list of lows and very lows.

• Low: Amazon, Deutsche Telekom, Enel, GlaxoSmithKline, Google, Hitachi, IKEA, Vale, Volkswagen
• Very Low: Accenture, BMW Group, Carrefour, CVS Health, Deutsche Post DHL, E.ON SE, JBS, Nestlé, Novartis, Saint-Gobain and Unilever

Several of the companies dispute the findings.

What’s going on

It’s not that these are inherently bad companies, but there are major issues with their pledges.

• Not enough companies are seeking to decarbonise more than 90% of their full value chain, as just three – Maersk, Vodafone and Deutsche Telekom – have committed to do so.
• The exclusion of emission sources or market segments is a common issue that reduces the meaning of targets.
• 24 of the 25 companies studied will rely on carbon offsetting. These can be cleverly obscured; the authors note how while Unilever and Nestlé don’t advocate offsetting at the corporate level, its use across brands is relatively common.
• Beware the net zero numbers. Some firms have set extremely ambitious targets like getting to net zero by 2030, but these comparisons can sometimes be to ultra-high-emission years.

Bottom line

“Companies must face the reality of a changing planet. What seemed acceptable a decade ago is no longer enough,” says Gilles Dufrasne, policy officer at Carbon Market Watch, in a statement.

“Setting vague targets will get us nowhere without real action, and can be worse than doing nothing if it misleads the public. Countries have shown that we need a fresh start when adopting the Paris Agreement, and companies need to reflect this in their own actions.”

Sourced from Corporate Climate Responsibility Monitor, WARC. [Image: Pexels]