Stockholm (NordSIP) – At COP27 last December, the UN-sponsored High-Level Expert Group (HLEG) on the Net-Zero Emissions Commitments of Non-State Entities presented the results of its work. In her presentation, HLEG leader Catherine McKenna said that this coming year is a make-or-break moment for net-zero. She warned of the threat posed by delay, obfuscation, greenwashing, empty slogans and hype. This Monday 13 February, the New Climate Institute (NCI) published its Corporate Climate Responsibility Monitor 2023 report in co-operation with Carbon Market Watch. Are companies living up to their net-zero pledges? Spoiler alert: it would appear not.
NCI selected the 24 companies in the study on the basis of their size and the boldness of their climate claims. The group is made up of the three largest multinationals from eight typically high-emitting consumer and industrial sectors, with combined 2021 revenues of USD 3.1 trillion. The 24 companies are jointly responsible for about 4% of global greenhouse gas (GHG) emissions. The good news for NordSIP readers is that two Nordic firms fare relatively well in the study. The bad news is that 15 of the companies score “low” or “very low” on the integrity of their climate strategies. This almost two thirds failure rate would be bad enough in the wider market, but these firms present themselves as “climate leaders” and have signed up to all the trendiest environmental initiatives, with all the corresponding nice badges and stickers to put on their websites and stakeholder reporting.
All talk and no climate action
The Year of Climate Accountability 2023 has not started well. As members of initiatives under the Race-to-Zero umbrella, the 24 analysed companies have committed to implementing decarbonisation plans aligned with a 1.5 degree warming objective. The main headline from NCI’s 177-page report is that for most of the companies the numbers simply do not add up. Worse, there has been little or no discernible progress from the 10 companies that were also reviewed in NCI’s first version of this report last year, despite the UN HLEG recommendations and updated Science Based Targets initiative’s (SBTi) Net Zero Standard having been released in the meantime. With a median 2030 emission reduction commitment between 15 and 21% when the level needs to be at least 43% it is hard to have any confidence whatsoever in these firms’ on-paper pledges, let alone their concrete actions on GHG reduction.
Northern lights
Let us put aside the worst culprits such as PepsiCo and Samsung for the moment and lighten the mood a little with a look at Maersk and H&M, whose reports have a greenish colour scheme rather than wall-to-wall red. H&M’s overall environmental credentials are by no means squeaky clean, as covered in the Laundromat’s look at fast fashion last year, and further evidenced here by a smattering of low or moderate scores in the NCI report. Nevertheless, the firm deserves credit for high integrity and transparency scores for its 2040 carbon neutrality target. Crucially, H&M has included Scope 3 emissions in its 90% reduction target. The climate and sustainability implications of the company’s production process that we highlighted in last year’s article are once again red flags in the NCI report. H&M’s overall score for integrity and transparency is “moderate”, so there is room for improvement, and they benefit from looking better within this very poor peer group.
Danish shipping company Maersk outscores H&M in the “damned with faint praise” scores with an overall “reasonable.” Again, Maersk scores very well for the transparency and integrity of its long-term targets, but there are question marks about its green fuel targets. These need to be properly addressed, given that 50% of the company’s emissions derive from the fuel consumption of its shipping fleet.
Climate credentials should be earned
Accountability is very much top of NordSIP’s editorial agenda this year and covered on an increasingly obsessive level by the greenwashing-focused Laundromat. It does appear far too easy for companies to sign up to sustainability initiatives and enjoy the positive marketing gains without any credible follow-up in many cases. Laundromat believes the positive publicity should be balanced by the possibility of equally public “three strikes and out” delisting. Unfortunately, the market currently relies on the hard work of non-profit organisations like the New Climate Institute, Carbon Market Watch and others to police this Race-to-Zero. Many of the discrepancies in these firms’ net-zero plans are glaringly obvious, but so far few of them have been properly penalised by governments and regulators for this “creative” environmental accounting.
