Amazon.com, GlaxoSmithKline PLC and Unilever PLC stretching the truth with net zero and other climate pledges

Climate pledges about cutting emissions and reducing carbon by of the world’s largest companies, including Amazon, GlaxoSmithKline PLC (LSE:GSK), Unilever PLC (LSE:ULVR) and Nestlé are not quite what they are made out to be, according to new analysis.

While the big 25 have promised to reduce emissions by 100%, as suggested by their “net zero” and “carbon neutral” claims, in reality the measures they have set out only commit to reduce their emissions by 40% on average, a report by the  NewClimate Institute in collaboration with Carbon Market Watch has found.

Evaluating 25 major companies across different sectors and geographies, the Corporate Climate Responsibility Monitor conducted a detailed evaluation of climate pledges require and found the majority cannot be taken at face value.

Only one company’s net zero pledge – Maersk, the Danish shipping group –  was evaluated as having “reasonable integrity”; with three companies having “moderate” integrity, Apple Inc (NASDAQ:AAPL), Sony Group Corp (NYSE:SONY) and Vodafone Group PLC (LSE:VOD). 

Only Maersk, Vodafone and Deutsche Telekom “clearly commit” to deep decarbonisation of over 90% of their full value chain emissions.

A dozen companies had “low” integrity: Amazon.com Inc (NASDAQ:AMZN), Deutsche Telekom, Enel, GlaxoSmithKline, Alphabet Inc’s (NASDAQ:GOOG) Google, Hitachi, IKEA, Vale, Volkswagen and Walmart Inc (NYSE:WMT).

Ten companies had “very low” integrity: Unilever, Nestlé, Accenture (NYSE:ACN), BMW Group, Carrefour, CVS Health Corp, Deutsche Post DHL, E.ON, JBS, Novartis and Saint-Gobain.

The majority of the companies with net zero or carbon neutrality pledges have failed to put forward ambitious targets, with many pledges “undermined by contentious plans to reduce emissions elsewhere, hidden critical information and accounting tricks”, the report found.

Of the 25, there were 13 companies that have backed their net zero headline pledges, but these explicit emission reduction commitments only commit to reduce their full value chain emissions from 2019 by only 40%, with the other 12 companies setting out no specific emissions reduction commitments for their net zero target year.

Excluding emission sources or market segments was a “common issue”, which the report said “reduces the meaning of targets”, with eight companies excluding upstream or downstream emissions in their value chain.

Another issue that undermined integrity was carbon offsetting, with 24 of 25 companies seeming to rely on offsetting credits “of varying quality”.

Furthermore, some companies, such as Nestlé and Unilever, distance themselves from the practice of offsetting at the parent company level, but “allow and encourage” individual brands to pursue offsetting to sell carbon-neutral labelled products.

Some apparently ambitious targets may lead to very little short-term action, the report authors said, noting that GSK “may delay the implementation of key emission reduction measures until 2028/2029, ahead of its 2030 target”.

Thomas Day of NewClimate Institute, lead author of the study, said: “We set out to uncover as many replicable good practices as possible, but we were frankly surprised and disappointed at the overall integrity of the companies’ claims. 

“As pressure on companies to act on climate change rises, 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.”

Gilles Dufrasne from Carbon Market Watch said: “Misleading advertisements by companies have real impacts on consumers and policymakers. We’re fooled into believing that these companies are taking sufficient action, when the reality is far from it. Without more regulation, this will continue. We need governments and regulatory bodies to step up and put an end to this greenwashing trend.”

Promising examples of climate leadership were also identified. Google is developing innovative tools to procure high quality renewable energy in real-time; this is being picked up by other companies. Maersk and Deutsche Post are making major investments in decarbonisation technologies for transport and logistics. There is still ample potential for companies to replicate and scale up these emerging best practices.

“Companies must face the reality of a changing planet. What seemed acceptable a decade ago is no longer enough,” said 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.”