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Steeper corporate emissions cuts needed by 2030 to keep Paris Agreement alive, analysis finds

Standalone renewable energy certificates, carbon removals and bioenergy undercut corporate claims, researchers suggest. Read More

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The emissions reductions planned by 51 of the world’s largest companies are ambitious but still fall short of the cuts needed to meet the goals of the Paris Agreement, according to a new analysis of net-zero pledges.

The companies studied — which self-reported 8.8 gigatons of greenhouse gases in 2022, or about 16 percent of global emissions — are aiming for a median cut of about 30 percent by 2030 across their own operations and those of their supply chain, according to the 2024 Corporate Climate Responsibility Monitor.

That’s far short of the minimum 43 percent reduction needed to keep global temperature increases below 1.5 degrees Celsius by 2050, the analysis found. The research is a joint project of the nonprofit NewClimate Institute and corporate “watchdog” Carbon Market Watch.    

“Aspiring to be net zero by 2050 is of little use if we trigger runaway climate change over the next few years,” said Sabine Frank, executive director of Carbon Market Watch, in a statement. “Corporations urgently need to halve their emissions before 2030. The dozens of corporations analyzed by [the monitor] are neither individually nor collectively on track for emissions reductions that are compatible with a 1.5 degrees C scenario.”

No corporate climate claim has ‘high’ integrity

This year’s edition of the monitor, the third so far, scrutinized 28 companies in four “focus” sectors: automotive; energy: fashion; agriculture; and retail. (It also updated its analysis for companies in previous reports, including Amazon, Apple, Google, Microsoft and Walmart.)

None of the companies’ claims were ranked as having “high” integrity.

Fewer than half of them disclosed plans the researchers deemed to be of either “reasonable” or “moderate” integrity over the long term. They were energy companies Enel and Iberdrola (“reasonable”); automotive companies Stellantis and Volvo Group (“moderate”); food companies Danone and Mars (“moderate”); and fashion companies H&M, Inditex and Nike (“moderate”).

Corporate claims

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Overview of companies assessed in the Corporate Climate Responsibility Monitor 2024 (companies are listed alphabetically in each rating category)

The remainder were rated as either “poor integrity” (including Adidas, Daimler Truck, Engie, Duke Energy, Fast Retailing, Nestle, Tesco, Volkswagen and Walmart) or “very poor integrity” (including Kepco and Toyota). 

Beware ‘false’ solutions, researchers warn

Far too many companies rely on “creative carbon accounting” and solutions that the researchers describe as “dubious” or “questionable.” These include:

  • Carbon removals and “insetting”: A minority of the companies analyzed have committed to a phaseout of fossil fuels. But to achieve that they are investing in emerging carbon removal approaches, which could perpetuate petrochemical use. The researchers were particularly skeptical about the process of “insetting,” which relies on land-based carbon sequestration schemes across agricultural supply chains. To reduce emissions from farming it would be better to cut methane emissions from livestock or nitrous oxide emissions from fertilizers, the report said.  
  • Standalone renewable energy certificates: While more companies are directly investing in power purchase agreements and other contracts to bring more renewable energy onto electric grids in places where it doesn’t yet exist, there are still limited incentives for them to do so. A large number of companies continue to buy standalone renewable energy certificates on the open market. While that strategy is allowed under current carbon accounting practices, these sorts of certificates don’t generally add new renewable capacity.
  • Bioenergy: More than half the companies assessed include biomass and energy produced from organic matter as part of their decarbonization plans. “Contrary to popular belief, bioenergy is not an emissions-free energy source, and sourcing biomass is likely to have negative impacts on ecosystems and local communities.”

“Most targets are often not substantiated with real transition plans,” said Frederic Hans, a researcher with NewClimate Institute, during a media briefing. “At least, they do not have publicly communicated measures and transition plans.”

The report calls out four exceptions to that finding:

“These are really encouraging things to see,” Hans said. “It’s really the time to identify good practices and really scale them up.”

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