Net-zero corporate commitments largely over-reliant on carbon offsetting, report finds

An analysis of 25 corporates' net-zero commitments has found that they cover, on average, just 40% of annual greenhouse gas emissions, with the likes of Unilever, Nestle and BMW Group named among the worst offenders.


Continue Reading

Login or register for unlimited FREE access.

Login Register

Net-zero corporate commitments largely over-reliant on carbon offsetting, report finds

Several sustainability leaders are urging businesses to take note of the damning findings

The findings were published today (7 February) by Berlin-based orgainsation the New Climate Institute and non-profit Carbon Market Watch and have made national headlines here in the UK.

The two organisations assessed the scope of the long-term net-zero commitments of 25 large businesses across a range of sectors including telecommunications, logistics, consumer goods, energy and automotive. Collectively, the value chains of these businesses account for some 5% of annual global emissions.

A headline finding is that the companies are collectively planning to reduce emissions across their value chains by some 23% by 2030, against a 2019 baseline. The Intergovernmental Panel on Climate Change’s (IPCC) landmark report in 2018 recommended that global emissions are halved by 2030 to give the best chance of avoiding the worst impacts of the climate crisis.

By the long-term end-date of the corporate net-zero pledges, direct reductions of emissions across the corporates’ value chain are likely to stand at just 40%. 19 of the 25 companies have already begun drawing up plans to use offsetting to address the remaining emissions.  The report claims that most of these offsetting plans are not science-based and that the corporates are failing to account for the fact that nature-based carbon sequestration can be reversed.

Worryingly, just eight of the 25 firms provided the researchers with information on how they plan to address Scope 3 (indirect) emissions, which accounted for 87% of the total climate footprint of each company on average. Only three companies – Maersk, Vodafone and Deutsche Telekom – are deemed to have “deep decarbonisation” plans covering 90% or more of their whole value chain emissions by their net-zero deadline years.

The New Climate Institute and Carbon Market are accusing the corporates of failing to collect – or hiding “critical information” like Scope 3 data. This is compounded, the report states, by a seeming lack of investment in “readily-available” solutions to reduce emissions in the short-term, including onsite renewable energy generation and the use of Power Purchase Agreements (PPAs). The report expresses concern that many businesses are betting on implementing new processes and technologies, which may not exist commercially yet, near the end of their target period, to deliver last-minute reductions and offsets.

Overall, the report states that the net-zero pledges of Accenture, BMW Group, Carrefour, CVS Health, Deutsche Post DHL, E.ON SE, JBS, Nestlé, Novartis, Saint-Gobain and Unilever have “very low integrity”. Those classed as having “low integrity” are Amazon, Deutsche Telekom, Enel, GlaxoSmithKline, Google, Hitachi, IKEA, Vale, Volkswagen and Walmart.

“Companies must face the reality of a changing planet – what seemed acceptable a decade ago is no longer enough,” said Carbon Market Watch’s policy officer Gilles Dufrasne.

“Setting vague targets will get us nowhere without real action, and can be worse than doing nothing if it misleads the public. Countries have shown that we need a fresh start when adopting the Paris Agreement, and companies need to reflect this in their own actions.”

Growing greenwashing concerns

Recent months have seen a string of reports published following research into the credibility of corporate net-zero targets.

Last November, after COP26, Net-Zero Tracker published a stocktake of net-zero targets which revealed  an “explosion” of interest in the private sector – but still only gradual improvements in the integrity of delivery plans.

The stocktake revealed that most businesses (68%) have not set net-zero targets that cover all of their indirect (Scope 3) emissions. 43% of businesses have targets that cover no Scope 3 emissions.

Also last November, a poll of 311 UK-based  businesses found that just one-third (35%) of those with a net-zero target have collected their emissions baseline data and prepared to measure emissions going forward.

In a bid to tackle greenwashing, the Science Based Targets initiative (SBTi) has launched  the world’s first standard for corporate net-zero emissions aligned to climate science. The launch of the Net-Zero Standard came shortly after the initiative outlined plans for increasing its minimum target-setting requirement to 1.5C, from ‘well-below’ 2C at present.

Sarah George

 

© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.

Comments (1)

  1. Kim Warren says:

    Off-setting is essentially a fraud .. emit now – recapture later. Except there is no "later". We need True Zero as fast as possible, not Net Zero – a phrase that should never have been invented, like ‘sustainable fuels’.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie

Subscribe