Corporate Emissions Pledges Wide of the Mark

Only three companies have “the depth of commitment” to reach their net-zero emissions goals by the target year. Maersk, Vodafone and Deutsche Telekom could achieve more than 90% decarbonization of their value chains, the institute found. On the other end of the scale, at least five companies will have reduced emissions by less than 15%. 

Of the 25 companies, 13 are specific about their reduction targets but will have only cut emissions by an average of 40%. The other 12 companies are unspecific about their reduction commitments for their target years.  

“The key finding is that companies’ net-zero pledges are not what they may seem,” one of the authors of the report, Thomas Day, wrote on NWI’s website. “We found that the headline pledges of 25 of the world’s largest companies in reality only commit to reduce emissions by 40% on average, not 100% as suggested by the terms ‘net-zero’ and ‘carbon neutral.’”

The pledges of Accenture, BMW Group, Carrefour, CVS Health, Deutsche Post DHL, E.ON SE, JBS, Nestlé, Novartis, Saint-Gobain and Unilever “have very low integrity,” the institute says. Amazon, Deutsche Telekom, Enel, GlaxoSmithKline, Google, Hitachi, IKEA, Vale, Volkswagen and Walmart are classified as having “low integrity.”

“To stand a reasonable chance of limiting global warming to 1.5°C, global CO2 emissions must decrease by 45% between 2010 and 2030 and reach net zero around 2050,” the report says. “While most of the companies assessed pledge to reach net zero emissions even earlier, they do not match those pledges with clear emission reduction strategies.”

The German carmaker BMW challenges its assessment in the NCI report. 

“We do not agree with this rating,” Kai Zöbelein, BMW’s spokesman for sustainability, told Sustainability InSite. 

BMW “is committed to climate neutrality across the entire value chain by 2050 at the latest,” Zöbelein said. “On the way to this goal, the company has formulated clear goals for the year 2030.” 

NCI also calls into question the reporting standards themselves, citing potential conflicts of interest if they both define and assess performance against their own criteria and guidelines. Most of the Science Based Target Initiative ratings of 18 companies are “either contentious or inaccurate, due to various subtle details and loopholes that significantly undermine the companies’ plans,” the institute says.

>Read more about the Science Based Targets Initiative here.

BMW is one of the companies that has checked its goals against the SBTI, but objects to NCI’s judgment that the SBTI is unsound. 

“In the ‘Corporate Climate Responsibility Monitor’ the methodology of the Science Based Targets Initiative is seen as insufficient – and based on this, the sustainability strategy of the BMW Group is rated as insufficient,” Zöbelein said.

Another finding is that the way companies present their reduction measures often has “limited information that can be of use to understand the potential impacts of the measures.”

None of the 25 companies assessed provides detailed information on their pursued emission reduction measures, the report says. NCI says this lack of information “hinders an understanding of whether companies implement adequate measures that target all relevant emission sources.” BMW was assessed as moderately transparent, something that the carmaker also challenges.

“The BMW Group can be measured by the effectiveness of its efforts,” Zöbelein said. “We report transparently with proven performance data on the CO2 reductions in our entire value chain.”

NCI raises concerns that companies demonstrate “little sense of urgency.” 

“Some companies might delay the implementation of crucial measures that are available today to the last moment possible to meet their targets,” the report says. 

Zöbelein responded: “With regard to the criticism of the lack of a phase-out date for combustion technology, the BMW Group once again points out that in 2030 at least 50 percent of its global sales will consist of fully electric vehicles. Overall, the company will put around 10 million fully electric vehicles on the road in the next 10 years. We will seize every opportunity for faster electrification.”

NWI declined to answer Sustainability InSite’s questions.