An analysis of the carbon cutting plans of 25 major companies suggests they only commit to reduce their emissions by 40% on average, falling far short of their net zero targets.
The analysis in the Corporate Climate Responsibility Monitor was conducted by NewClimate Institute, Germany, in collaboration with Carbon Market Watch.
The research comes in the wake of the historic ‘Glasgow Climate Pact’ agreed at the COP26 climate meeting. The meeting achieved more than some expected but fell short of the 2015 Paris Agreement, in which countries were asked to make changes to keep global warming ‘well below’ 2°C – and to try to aim for 1.5°C – to prevent a climate catastrophe.
Companies have a crucial role to play in helping to achieve the Paris targets. ‘The companies we picked for our analysis represent a cross-section of industries and sectors and have an enormous influence on the global economy and society,’ said Sybrig Smit, climate policy analyst. ‘Given this big influence and potential impact, they can ensure transformational change throughout the economy.’
She and her colleagues evaluated 25 major companies – operating across different sectors and geographies – to determine the transparency and integrity of their pledges and concluded that only one company’s pledge had ‘reasonable integrity’; three ‘moderate’ and ten ‘low’ with around half rated as ‘very low’ integrity.
‘We were quite shocked about the extent of creativity that some companies apply to claim a credible path to net zero, and the amount of effort that it takes to reveal that,’ said Smit. ‘There is no standardised approach for information disclosure on climate targets and actions; it required significant resources from the analysts to understand what companies are committing to, and to identify key details that sometimes significantly undermined those commitments.’
The shipping company Maersk came out on top, with ‘reasonable integrity’, followed by Apple, Sony and Vodafone with ‘moderate integrity’.
As well as committing to deep emission reductions, Maersk commits to reduce emissions across its value chain by at least 90% by 2040, which appears to be an ambitious target for a sector where deep decarbonisation technologies are not yet sufficiently matured.
By value chain, the team means all Scope 1, 2 and 3 categories of emissions; Scope 1 covers direct emissions – for example while a company is running its boilers and vehicles – while Scope 2 covers indirect emissions, for instance in generating the electricity for heating and cooling.
The most significant category of all is Scope 3, which includes all emissions associated, not with the company itself, but those that the organisation is indirectly responsible for, from buying products from its suppliers, and emissions from its products when customers use them.
When it comes to Maersk, for example, the company is also investing in emerging technologies to decarbonise many of its major emission sources, including scope 3, and pioneering alternative fuels to replace conventional marine fuels, which currently account for approximately 60% of Maersk’s greenhouse gas footprint.
‘Most vessels run on heavy fuel oil, which is an extremely polluting fuel that comes from the remnants of oil refining,’ said Smit. ‘Ships using heavy fuel oil emit substantial amounts of carbon dioxide, sulphur and black carbon. The shipping sector can only achieve full decarbonisation by adopting alternative fuels, which are not yet available at scale.’
The analysis shows that the 13 companies that have backed their net zero headline pledges with explicit emission reduction commitments commit, on average, to reduce their full value chain emissions from 2019 by only 40%.
The headline pledges of just three of the 25 companies – Maersk, Vodafone and Deutsche Telekom – clearly commit to deep decarbonisation of over 90% of their full value chain emissions.
Eight companies exclude upstream or downstream emissions in their value chain – Scope 3 emissions – which usually account for over 90% of the emissions under their control.
At least two thirds of the companies rely on removals from forests and other biological activities, which can easily be reversed by, for example, a forest fire. Sybrig Smit said: ‘Natural weather events or anthropogenic influences can at any point in the future cause the degradation or razing of forests, mangroves, soils, or savannas. When such damages occur, this leads to the re-release of captured carbon.’
Various technologies are being developed for carbon capture and storage, from mechanical trees to scattering rock dust on farmlands, which are the subject of the Science Museum exhibition, Our Future Planet. ‘It is good to invest in technological solutions for carbon capture, but they are not a substitute for reducing emissions as fast as possible,’ she commented.
The analysis also found that some apparently ambitious targets set by companies are skewed because they are compared to a base year with extraordinarily high emissions.
They did, however, find examples of climate leadership: Google is developing innovative tools to procure high quality renewable energy in real-time. Maersk and Deutsche Post are making major investments in decarbonisation technologies for transport and logistics.
The Science Museum Group has signed up to the Science-based Target Initiative which splits emissions into all three scopes and requires us to deal with all three, notably the 90% that arise from Scope 3, the goods and services we buy. Our museum group aims to achieve net zero by 2033.