Cutting corporate carbon
There’s a big difference between advertising emissions goals and making them really matter
What do corporate climate pledges mean?
Since the international Paris climate accord of 2015, terms like “carbon neutral,” “net-zero,” and “climate positive” have entered the popular vocabulary as global corporations have begun issuing commitments to reduce their carbon footprint. Though the language in each corporate pledge is slightly different, “carbon neutral” means that any CO2 released into the atmosphere from a company’s activities will be balanced by an equivalent amount being removed. “Net-zero” emissions is a similar idea, but includes all greenhouse gases. A few companies have pledged to be “climate positive” (also referred to as “carbon negative”), which means they will remove more carbon emissions from the atmosphere than they emit.
Are companies on track to meet their goals?
Unfortunately, it appears the answer, at least for now, is no. A new analysis conducted by researchers from the nonprofits New Climate Institute and Carbon Market Watch looked at 25 major companies—including Amazon, GlaxoSmithKline, Google, Ikea, and Nestlé—to determine the integrity, transparency, and implementation of their net-zero or carbon-neutral pledges. What they found is that though all the companies claimed they would meet their pledges by or before 2050, in reality, they were only doing enough to reduce future emissions by 40 percent on average—falling far short of the promised net-zero goals. The authors found that just three companies—Maersk, Deutsche Telekom, and Vodafone— “clearly commit to deep decarbonization of over 90 percent of their full value chain” by their stated deadlines. Many companies with public pledges made no specific, quantifiable commitment.
What can make pledges more credible?
Transparency is key. Some companies that committed to reducing emissions have compiled all their data in downloadable reports. Some have even gone a step further and show current and historical emissions broken down to specific emission sources. That transparency lets outsiders know that a pledge is not just window dressing. Investing in emerging technologies is essential. For instance, the shipping company Maersk is pioneering alternative fuels to replace conventional marine fuels, which currently account for approximately 60 percent of Maersk’s greenhouse gas footprint. Also crucial is committing to actually reducing emissions, and not just buying so-called carbon offsets, which involves paying others for carbon reduction—claims that are often contentious.
How do carbon offsets work?
Carbon offsetting allows a company to pay others to reduce or remove greenhouse gas emissions equal to that of the CO2 emissions it produced. These carbon credits may go to fund forest conservation or reforestation, hydropower, the creation of wind farms, solar power, or even farming communities trying to make better use of animal waste. That sounds great, except that often the claims made by buyers of offsets are exaggerated. Not all offsets on the market get a careful vetting, which means choosing the right ones requires doing some homework, and there are often disputes about exactly what should and shouldn’t be counted. Experts worry that offsets incentivize companies and corporations to shift the responsibility of reducing emissions to others rather than dealing with the real issue at hand: changing their own infrastructure so that they pollute significantly less or not at all.
Where do emissions from suppliers fit in?
This may be the most important part of a large company’s impact on climate, accounting for as much as 90 percent or more of their greenhouse gas emissions, according to the Environmental Protection Agency. The NewClimate Institute and Carbon Market Watch analysis found that supply-chain emissions accounted for, on average, 87 percent of total emissions for the 25 companies they reviewed. Companies doing a good job in this area ask their suppliers to set their own climate targets, or only employ ones that have already done so. They also ask suppliers to use low-emission materials whenever possible, and push them to choose equipment that is less polluting and more energy efficient.
What makes for a viable sustainability strategy?
Corporations can begin by putting their own houses in order, looking internally at decision making, operations, culture, and other areas. One option that has become popular is naming a “chief sustainability officer.” That can be an effective strategy—if the position is actually empowered to call for real change and has a direct line to the CEO. Only about one-third of sustainability officers report to the CEO; some actually report to the head of marketing— a bad sign. For sustainability initiatives to work, employees across the company must get the signal that this has buy-in at every level of the company—even the board of directors. Employees are frequently eager to help with sustainability efforts, but only if they know that those efforts are genuine.