An international group of experts has published an analysis of the environmental pledges made by 24 of the biggest multinational corporations on the planet and has concluded they are ambiguous, even misleading, and extremely insufficient. All of the companies examined present themselves as ambitious in the battle against global warming and have announced plans and targets for reducing their emissions, bet when these programs are placed under the microscope, the researchers discovered that the effect they will actually produce in terms of reducing greenhouse gases (GHG) is considerably less than what is required. As an example, scientists have warned that global emissions should be reduced by 43% by 2030, but the plans produced by the companies under scrutiny will only result in a reduction of 21% in their emissions in the most optimistic of scenarios.
“Most companies’ climate strategies are mired by ambiguous commitments, offsetting plans that lack credibility and emission scope exclusions,” the 2023 Corporate Climate Responsibility Monitor report stated. The study, carried out by the NewClimate Institute and Carbon Market Watch, reserved limited praise for some of the companies researched. Only shipping giant Maersk has a climate strategy rated as “reasonable” in the study. Eight other companies (Apple, ArcelorMittal, Google, H&M Group, Holcim, Microsoft, Stellantis and Thyssenkrupp) display a “moderate level of integrity” in their climate commitments, the report stated. The other 15 firms analyzed have climate strategies of “low or very low integrity.”
Almost all multinationals have plans that promise to achieve net zero emissions or emissions neutrality over the next few decades and that is where the study points out where the main problem lies: long-term goals are of little practical use when drastic cuts are required between now and 2030, a decade science considers critical in the fight against climate change. “There is a critical need to shift attention to the 2030 blind spot. Companies’ climate pledges for 2030 fall well short of the required ambition and are inappropriately verified,” the report notes. Furthermore, these commitments often do not cover the entire cycle of the companies’ business activity. In other cases, “2030 targets are misleading due to reliance on offsetting.”
Emissions offsets are key to understanding “greenwashing” by large multinationals. “Offsetting plans – under various guises – still remain a major stumbling block for the credibility of corporate climate strategies,” the report notes. Eduardo Posada, a member of the NewClimate Institute and one of the authors of the study, explains: “The use of offsets is one of the main elements that make a carbon-neutral commitment mean very little in terms of reducing emissions and mitigating climate change. A carbon-neutral commitment is misleading if it actually means that the company is going to reduce 20% of its emissions and offset or neutralize the rest.”
The authors of the study note that at least three-quarters of the evaluated companies rely heavily on offsets through forestry and land-use projects to achieve their climate pledges. Science has already warned that the absorptive capacity of forests is limited and shrinking, so offsets should be a last resort and not at the center of a company’s climate strategy. The analysts conclude that the 24 companies in the sample “plan to offset between 23% and 45% of their emissions footprint” today in order to achieve their long-term pledges of carbon neutrality, a strategy they consider to be unattainable.
Another major shortcoming identified by the researchers is the exclusion from climate pledges of a considerable part of the gases a company generates. This is achieved, for example, by focusing climate plans only on emissions linked to a single part of production and not to the entire production cycle. “From the companies assessed, the average company’s carbon neutrality claim covered just 3% of their emission footprint, although consumers could be misled into understanding the claims apply to a company’s entire business,” the report notes.
Most major companies now have public climate strategies and targets “many of which include pledges that appear to significantly reduce, or even eliminate, their contributions to global warming.” But, as the report warns, it remains difficult to distinguish “real climate leadership from greenwashing.” This situation is compounded by “a general lack of regulatory oversight at international, national and sectoral levels.”
“To tackle greenwashing, we need more regulation. We cannot let companies voluntarily commit to carbon neutrality targets without defining and regulating what neutrality means,” says Posada. In its conclusions, the report places the spotlight on regulators, who it warns not to “rely on existing voluntary initiatives to ensure compliance with the standards necessary for credible and transparent corporate climate action.” The authors therefore applaud initiatives such as the UN group set up to combat greenwashing and the steps being taken by the European Union to prevent misleading corporate advertising.
Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition