“As pressure on companies to act on climate change rises, their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction.”

25 of the world’s leading companies are not on track to meet their net-zero emissions pledges and have announced  false or misleading net-zero strategies to act on climate change.

In fact, only some of them were found to have clear commitments to reduce emissions and that too by an average of 40% – far less than the near 100 % reductions promised.

These are the findings of the Corporate Climate Responsibility Monitor released this week, conducted by NewClimate Institute – an organization based in Germany – in collaboration with Carbon Market Watch.

The two climate groups analysed carbon-neutral or net-zero plans of some of the world’s leading organizations across different sectors and geographies and gave each of them an “integrity” rating for their ‘climate pledges’.

The final rating was based on factors like annually disclosing emissions; giving a breakdown of emission sources; and disclosing information in an understandable way.

 Findings

In the report none of the companies surveyed reached the highest integrity grade possible.

Just three firms — Maersk, Vodafone and Deutsche Telekom — demonstrated a clear commitment to reduce all emissions by more than 90%.

 The Danish shipping giant Maersk got the second-highest “reasonable integrity” rating.

Apple and Sony ranked “moderate integrity” whereas Amazon, Google, IKEA, Volkswagen, and Walmart secured “low integrity” ratings.

10 companies, including CVS Health, Nestlé, Carrefour, and Unilever, came at the bottom with the lowest ranking.

‘Surprised and disappointed’

“We set out to uncover as many replicable good practices as possible, but we were frankly surprised and disappointed at the overall integrity of the companies’ claims,” lead author Thomas Day of NewClimate Institute said.

“As pressure on companies to act on climate change rises, their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their actions.”

New report by @newclimateinst and @CarbonMrktWatch on ‘net zero’ plans by world’s biggest companies has this chart summarizing global ESG:

"What they appear to pledge": Massive

"What they really commit to": Little

"What is left out": Almost everything

"What is unclear": Lots pic.twitter.com/PjsxlsB3DT

— Assaad Razzouk (@AssaadRazzouk) February 7, 2022

Top corporations are doing barely anything

A net zero target, which is critical in keeping global temperatures from rising more than 1.5° Celsius by 2050, means a company would need to reduce its greenhouse gas emissions as much as possible and offset any that remain.

However, the leading corporations with combined 2020 revenues of more than $3 trillion, and which account collectively for roughly 5% of global emissions were found guilty of doing barely anything and exaggerating their climate plans through “greenwashing tricks, using loopholes and omitting data.”

According to the report, two-thirds of the companies surveyed are relying on biological offsets like reforestation, planting trees, and other land-based activities to achieve their pledges.

But these offset mechanisms are increasingly being met with skepticism, as previous schemes have collapsed. Moreover, the strategies can easily be undone by disasters like forest fires.

The report also found that some companies such as Nestlé and Unilever ‘distance themselves from the practice of offsetting at the level of the parent company, but allow and encourage their individual brands to pursue offsetting to sell carbon-neutral labelled products’.

“Misleading advertisements by companies have real impacts on consumers and policymakers. We’re fooled into believing that these companies are taking sufficient action, when the reality is far from it.” Gilles Dufrasne from Carbon Market Watch said.

“Without more regulation, this will continue. We need governments and regulatory bodies to step up and put an end to this greenwashing trend.”

Response

Some of the companies mentioned have challenged the report’s findings, stating they are inaccurate or reliant on incomplete information.

Nestlé’s Global Head of Climate Delivery, Benjamin Ware, said the company’s net-zero roadmap was “rigorous and extensive.”

“We have engaged with the NewClimate Institute to explain the data and methodology behind our strategy,” he told CNN.

“We welcome scrutiny of our actions and commitments on climate change. However, the NewClimate Institute’s Corporate Climate Responsibility Monitor report lacks understanding of our approach and contains significant inaccuracies”.

Unilever’s response said: “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 New Climate Institute to see how we can meaningfully evolve our approach.”

Walmart also told CNN that the report did not “accurately characterize Walmart’s climate goals and actions, and the authors did not provide an opportunity to provide corrections.”

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