Amid soaring emissions, not one of the corporations evaluated in the latest Corporate Climate Responsibility Monitor received a clean bill of health for its climate strategy, though some isolated improvements occurred. This highlights the vital importance of governments stepping up to better regulate the climate action of the private sector.

The fourth edition of the Corporate Climate Responsibility Monitor – a joint initiative of NewClimate Institute and Carbon Market Watch – assessed the climate strategies of 20 of the largest global corporations in the tech, fast fashion, agrifood and automotive sectors.

Although there were examples of individual good practices scattered throughout, none of the evaluated companies, whose emissions continue to soar, received even a midpoint grade of “reasonable” for their climate strategies, with their scores falling in the moderate,  poor or very poor categories.

“While awareness of what constitutes credible corporate climate action is growing among companies and standard-setters, even the most ambitious companies often fail to align their business models with the speed and scale needed to stay below the Paris Agreement’s 1.5°C limit,” said Frederic Hans of NewClimate Institute.

This underscores the urgent need for governments to step up and finally take on their responsibility to regulate corporate climate action. “Government regulation is the backbone of climate action. Only in an ecosystem where regulators define and require truly credible climate action can different players fulfil their potential,” urges Benja Faecks, an expert on global carbon markets at CMW who has been working on the CCRM project. “A strong regulatory framework ensures that the private sector takes real climate action without engaging in misleading greenwashing, that corporate accountability frameworks validate and verify corporate climate plans against clear government requirements, and that civil society effectively scrutinises and holds large companies to account. However, this kind of regulatory framework is, unfortunately, missing in government inaction.”

Blurred 2030 vision

The CCRM assessed the following companies:

Last year, the CCRM estimated that the corporations assessed were on track to cut their the median greenhouse gas emissions by only 30% below 2019 levels instead of the near halving required to achieve the goals of the Paris Agreement. This year, however, it was not possible for the CCRM to update this figure. This is largely due to confusing and misleading accounting practices (like those for emissions related to electricity use, the mixing up of emissions reductions with land sequestration, poor disclosure of target parameters, as well as the overuse of various false solutions. 

In addition, corporate emission trajectories are increasingly difficult to assess due to the diversity of sector-specific bottlenecks, the lack of standardised scientific benchmarks for many decarbonisation measures, and the fact that absolute greenhouse gas emission reduction targets alone do not offer a comprehensive picture of actual corporate commitments. Together, these factors hindered a clear and consistent assessment of progress towards meaningful climate goals. 

Sectors under the microscope

All the sectors evaluated were either faced with rising emissions or slashing their emissions too slowly. In addition, no sector had embarked on the bold transition pathways required to truly climate-proof their industry. While the performance of all the sectors evaluated was disappointing, there were wide variations between and within them. 

When it comes to the agrifood sector, the food and agricultural companies assessed are making glacial progress towards slashing their long-term emissions and their climate plans are woefully inadequate to place them on a decarbonisation pathway that is compatible with the goals of the Paris Agreement. Danone came out on top of this disappointing crop (find out more about the performance of the agrifood sector).

H&M Group and other trendsetters in the fast fashion sector have made some improvements to their climate strategies and targets but the cohort as a whole is still significantly off track to implement the kind of transformative change required to ensure that the fashion sector contributes its fair share (read more about the fast fashion sector).

When it comes to redefining their business models, the tech giants are faring no better. Although the five companies have held on to net zero targets that are presented on paper as compatible with the goals of the Paris Agreement, their pledges are undermined by their rapidly mushrooming energy demands due to the exponential growth of artificial intelligence (learn more about the tech sector). 

Despite constituting over a tenth of all global greenhouse gas emissions, the climate juggernaut that is the automotive sector is on the slow lane to decarbonisation. For the companies evaluated, this is due to inadequate 2030 reduction targets, unsubstantiated long-term targets, the shaky phasing out of the internal combustion engine and the rocky road to electrifying car fleets, not to mention.

Transformative change

The CCRM outlines the transformative changes each sector needs to undertake in order to carry their fair share of the heavy lifting required to attain a sustainable society.  However, leaving companies to their own devices in this regard has proven ineffective and delivered slim pickings.

For this reason, governments must put in place a binding legislative and regulatory framework that sets the direction of travel for individual sectors and the economy as a whole. Voluntary standards need to complement these efforts by focusing more on enforcement and measurable impact. 

An accompanying policy briefing outlines the recommendations to governments and voluntary standards in detail.

About CCRM

First launched in 2022, the annual Corporate Climate Responsibility Monitor is a joint initiative between NewClimate Institute and Carbon Market Watch. NewClimate leads on investigating corporate climate strategies and CMW leads on the policy implications and recommendations of the research.