Big companies' climate pledges aren't as green as they look, report finds

Many of the world's largest companies are failing to take significant enough steps to meet their pledges to vastly reduce the impact of their greenhouse gas emissions in the decades ahead, according to a new report by the NewClimate Institute, an environmental organization that works to combat global warming.

Its researchers, who examined the actions of 25 companies, concluded that many of them are misleading consumers by using accounting practices that make their environmental goals relatively meaningless or are excluding key parts of their businesses in their calculations.

The companies have pledged to make their emissions reductions or to offset their emissions through such techniques as planting carbon-capturing forests over self-imposed periods ranging from 2030 to 2050.

The authors chose to study corporate giants, including Amazon and Walmart, which made bold climate pledges and who, because of their size, are seen as especially influential. In recent years, large corporations have increasingly adopted pledges to significantly reduce their carbon footprints — a priority of growing importance to many of their customers, employees and investors.

NewClimate Institute concluded that even though many companies have pledged to reach net-zero emissions, the 25 companies they studied have collectively committed to reduce emissions by about 40 per cent — not the 100 per cent that people might be led to believe from the companies' net-zero or carbon-neutral pledges.

"We were frankly surprised and disappointed at the overall integrity of the companies' claims," said Thomas Day of NewClimate Institute, one of the study's lead authors. "Their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their actions."

Among the 25 companies the researchers studied, 24 relied too heavily on carbon offsets, which are rife with problems, the report said. That's because carbon offsets often rely on carbon removal ventures such as reforestation projects. These projects suck up carbon but are not ideal solutions because forests can be razed or destroyed by wildfires, re-releasing carbon into the air.

Most of the companies, the report said, presented vague information on the scale and potential impact of their emissions-reduction measures or might have exaggerated their use of renewable energy.

The report called Amazon's goal of net-zero carbon by 2040 unsubstantiated. It said it was unclear whether Amazon's goal referred solely to carbon dioxide emissions or to all greenhouse gases. The report also said it was not clear to what degree Amazon planned to reduce its own emissions, as opposed to buying carbon offset credits, which rely on nature-based solutions.

In response, Amazon said it has been transparent about its investments in nature-based solutions, and disputed that its net-zero goals are based on offsets. The company said it's on a path toward powering its operations with 100 per cent renewable energy by 2025, five years ahead of its original target of 2030. It also highlighted other initiatives, including deploying 100,000 electric delivery vehicles by 2030.

As an example of a misleading goal, the report said U.S. health-care company CVS Health could potentially achieve its 2030 emissions target with little effort because it compared that target with a base year that included extraordinarily high emissions.

A CVS spokesperson responded that after the company's merger with Aetna in late 2018, 2019 was the first full year of data the company could use as a baseline for the new combined entity.

"By 2030, we plan to reduce our environmental impact by more than 50 per cent, including a reduction in our energy consumption and use of paper and plastic," the company said.

The NewClimate report said that Nestle, among the companies with the lowest marks, had emissions-reduction plans that covered only portions of its business and that its net-zero targets relied upon carbon offsets. The company also provided little detail on the renewable electricity sources it was pursuing, it said.