At a time when global carbon emissions need to be almost halved by 2030, 51 major corporations’ climate commitments amount only to reducing their median carbon footprint by as little as 30%, reveals the 2024 Corporate Climate Responsibility Monitor. Tighter regulations from governments are needed to raise the bar, both for companies which are taking insufficient action, and those who are not doing anything at all.
Reflecting the escalating graveness of the climate crisis and the urgent need for action, this year’s edition of the Corporate Climate Responsibility Monitor (CCRM), which was released on Tuesday 9 April, took a new departure by shifting beyond distant and often vague 2050 “net zero” targets to deep dive into the 2030 climate commitments of 51 companies (those assessed in 2024, 2023 and 2022).
The CCRM – a joint initiative of NewClimate Institute and Carbon Market Watch – found that the median absolute greenhouse gas emissions reductions of the analysed companies was only 30% (and at the most optimistic 33%) below 2019 levels. In contrast, the Intergovernmental Panel on Climate Change estimates that the world needs to eliminate 43% of greenhouse gases and 48% of the CO2 it pumps into the atmosphere by 2030. Moreover, a greater responsibility falls on the wealthy and industrialised, as reflected, for example, in the EU’s commitment to reduce its 2030 emissions by 55%, with the science saying that 65% would be closer to the mark.
“Aspiring to be net zero by 2050 is of little use if we trigger runaway climate change over the next few years. Corporations urgently need to at least halve their emissions before 2030,” says Carbon Market Watch Executive Director Sabine Frank. “The dozens of corporations analysed by the CCRM are neither individually nor collectively on track for emissions reductions that are compatible with a 1.5°C scenario.”
Frederic Hans from NewClimate Institute adds: “Four years into the critical decade to fight climate change, only a few companies commit to 2030 goals that reflect the latest climate science and present tangible strategies to meet them. The majority of companies must ramp up their climate strategies and match the urgency of the crisis we are in.”
2030 inaction
In spite of claiming to be in a race to reach net zero by mid-century, the typical major corporation investigated by the CCRM will have achieved only about two-thirds of the 2030 CO2 emissions reductions it needs to be compatible with the Paris Agreement goal of limiting global heating to 1.5°C.
Moreover, only eight of the 28 companies assessed in the 2024 analysis of four sectors (automotive, energy, fashion, agriculture and retail) have set 2030 targets which the CCRMs rate as of high or reasonable credibility, while only a tiny handful (Danone, Iberdrola, Mars and AB Volvo, the heavy vehicle manufacturer, not the carmaker) substantiate these targets with feasible implementation plans. Instead of slashing their emissions, the rest tend to rely heavily on creative carbon accounting and dubious or questionable solutions, such as (ill-defined) carbon removals, carbon capture and storage, renewable energy certificates and bioenergy.
“In this critical decade for climate action, corporate pledges often mask a lack of real ambition,” notes Benja Faecks, an expert on global carbon markets at CMW who authored the briefing accompanying the CCRM. “The reliance on questionable strategies detracts from genuine emissions reduction efforts, undermining the integrity of corporate climate targets.”
Shifting the 2050 goalposts
Even when zooming out to 2050, the situation does not appear considerably better. The “net zero” targets of about half of the 51 companies assessed are unclear or do not involve sufficient emissions cuts, especially when it comes to indirect emissions. Moreover, many 2050 corporate strategies disproportionately rely on carbon offsets to give the illusion of deeper or faster decarbonisation than is actually the case.
One promising development highlighted in the CCRM 2024 is that, while corporations continue to offset their emissions with carbon credits, very few now make questionable carbon neutrality claims for their products (four out of the 20 assessed in-depth in the 2024 edition). This is in part a product of the tireless campaigning of activists and environmentalists, tougher regulations in some parts of the world, such as the EU, as well as the recent scandals which have afflicted some leading offsetting practices, raising the risk of severe reputational damage for those who continue to pursue such strategies.
“It is good to see that ‘carbon neutrality’ is finally falling out of fashion, and not a moment too soon,” says Lindsay Otis, CMW policy expert on global carbon markets. “This greenwashing label was extremely confusing to the public and provided companies with a fig leaf behind which they could hide their inaction.”
“Misleading sustainability promises are damaging our pathway to a greener future. According to our evidence, consumers believe that climate-neutral claims mean the product or service does not emit CO2 at all and that companies are required to cut their emissions. But this is far from the truth,” explains Monique Goyens, director general of BEUC, the European consumer organisation.
Better governance
The 2024 CCRM highlights, as did previous editions, the chasm separating corporate climate pledges from their actual plans and the yawning discrepancy between their articulated aspirations and concrete actions.
“Fixing this requires corporations to get serious about the climate crisis and view it through the lens of ER (emergency room) rather than PR (public relations),” urges CMW Policy Director Sam Van den plas. Voluntary initiatives, which have assumed the role of standard setters for companies that sign up, must continue to raise the bar and establish more stringent requirements for corporate climate action, but cannot be the sole gatekeepers for corporate climate integrity. Government action is needed.
One major disadvantage of the current voluntary system is systemic: the pace of corporate action is decided internally and is dependent on the willingness, conviction and boldness of management rather than what is required to tackle the climate crisis.
Moreover, while the choice of whether or not to take corporate climate action remains private, the consequences and costs of inaction and business as usual are very public, with society left carrying the tab. This underscores the urgent and growing need for government action and regulation to compel companies to do what they need to do, not what they wish to do. Examples include setting binding sector-wide climate targets, and/or introducing or expanding compulsory carbon pricing or cap-and-trade emissions trading systems.
“As we navigate the complexities of corporate climate accountability, one thing is certain: voluntary initiatives alone won’t suffice,” concludes Van den plas. “It’s time for robust regulation to ensure that corporate actions align with the urgency of the climate crisis, moving us beyond rhetoric towards meaningful emission reductions.”
