Major global corporations are using false or misleading net-zero announcements to avoid meaningful and immediate greenhouse gas emissions cuts, according to a new assessment from two climate watchdogs of the action planned by industry leaders.
The analysis of the climate pledges of 25 of the world’s largest companies, many of which are household names, suggests the pledges will only amount to future emissions reductions of some 40 percent on aggregate — a far cry from the total decarbonization needed by midcentury to stave off the most dire consequences of global heating.
It identifies an apparently systematic effort from big corporations to exaggerate their climate action through “greenwashing tricks, using loopholes and omitting data,” something that experts said calls into question the credibility of net-zero plans that don’t center on rapid emissions reductions.
“We were shocked and surprised at the findings, especially because many of these companies position themselves as climate leaders,” said Silke Mooldijk, policy analyst at NewClimate Institute, which co-produced Monday’s assessment with Carbon Market Watch.
“If companies make such bold claims and pledges, they should back them up and also provide detail to assess the integrity of their targets and measures.”
The concept of net-zero is simple: By a certain date an entity — be it a business or a nation — must absorb as much carbon as it emits. More than 80 percent of global GDP is covered by some variety of net-zero promise, and the United Nations says the world must be carbon neutral by 2050 to limit temperature rises to 1.5 Celsius (2.7 Fahrenheit).
But scientists and analysts are increasingly concerned that some businesses are using net-zero as a way of back-loading climate action, relying on technology or nature to absorb pollution decades from now rather than focusing on reducing emissions today.
Monday’s assessment looked at the net-zero plans of multinationals with combined 2020 revenues of more than $3 trillion, and which account collectively for roughly 5 percent of global emissions.
It found that just three firms — Maersk, Vodafone and Deutsche Telekom — demonstrated a clear commitment to reduce all emissions by more than 90 percent.
Conversely, five of the companies analyzed had committed to cut less than 15 percent of their emissions. The average emissions reduction planned across the 25 corporations was less than 20 percent.
So how can an organization claim to be going net-zero and still leave the majority of its emissions untouched? The report found that several companies were only counting Scope 1 and 2 emissions — pollution derived directly from doing business, such as vehicle fuel and electricity for buildings — in their plans.
This omits Scope 3 emissions, which are emissions produced across a company’s entire value chain (all its activities and processes that go into making a product or delivering a service), and often make up the vast majority of its carbon footprint.
For example, the analysis suggested that Google — whose climate strapline reads “Carbon Neutral since 2007. Carbon free by 2030” — was overplaying its carbon neutrality hand. It determined that major Scope 3 emissions, which accounted for 60 percent of Google’s greenhouse gas emissions in 2020, were omitted from the claim.
Google did not respond to a request for comment.
Similarly, French supermarket giant Carrefour, which plans to be carbon neutral by 2040, was said to be focused primarily on reducing its Scope 1 and 2 emissions. If accurate, this would mean its net-zero claim covers less than 2 percent of its emissions.
The analysis said that Carrefour’s separate pledge to cut Scope 3 emissions by 29 percent by 2030 was “more significant” but that those emissions “appear not to be covered” by its headline carbon-neutrality target.
“For a net-zero target to be credible, it needs to include all relevant sources of emissions in the value chain,” said Alberto Carrillo Pineda, managing director and co-founder of the Science Based Targets initiative, which advises businesses on how to bring their net-zero goals in line with what the climate needs.
Although Pineda did not comment on specific companies’ climate plans, he stressed that “a threshold of credibility in the net-zero standard is that, for Scope 3, 90 percent of emissions need to be included. In a decarbonized world, there are no Scope 3 emissions, because there are no emissions, right? That’s really the end goal for all companies.”
A Carrefour spokesperson said the group was “engaged across the full scope of its indirect emissions (Scope 3) and in particular the impact concerning the use and manufacture of products sold.”
The spokesperson added that Carrefour had signed up to the Race to Zero initiative, which aims for global net-zero by 2050 and “which implies a reduction for all the three scopes.”
The analysis also identified another trend in how net-zero plans are presented: a varying but consistently heavy reliance on offsetting emissions rather than reducing them.
It said, for example, that Amazon’s net-zero 2040 climate pledge was being “weakened by relying on offset credits from nature-based solutions,” such as tree planting or conservation.
The assessment acknowledged Amazon’s establishment of the $100 million Right Now Climate Fund, which provides funding for nature-based solutions. But it said that relying on nature to offset emissions meant that such projects were “not appropriate sources of credits to support claims to neutralize carbon emissions.”
An Amazon spokesperson said the company regularly reports its carbon footprint as part of its net-zero mission, and that it has faith in nature-based solutions.
“We believe that nature-based solutions such as conservation, restoration, and improved land management actions play a necessary and complementary role alongside eliminating carbon from business activities to achieve the Paris Agreement,” the spokesperson said in an email.
Overall, 19 of the 25 corporations analyzed proposed to use offsets in their net-zero plans, but “none … disclosed sufficient details to fully back up their current offsetting claims or climate contributions,” the report found.
Mooldijk, the NewClimate Institute policy analyst, said nature-based solutions had a number of shortcomings.
“That’s really problematic, because these nature-based solutions have a low likelihood of permanence,” she said. “Trees may be cut down or lost in forest fires, which means that stored CO2 will be released into the atmosphere again.”
Stuart Parkinson, executive director of the Scientists for Global Responsibility initiative, which promotes ethical and sustainable climate action, said that companies relying on offsets through tree planting or carbon capture schemes presented a moral dilemma.
“There is ample need for these sort of afforestation or reforestation projects in really key areas to provide a decent, equitable lifestyle for everyone across the world,” he said.
“And to take any of those trees and use them to offset luxury items is grossly inequitable and unsustainable.”
Then there is the issue of double counting — who gets credited for the emissions saved following a consumer-supplier transaction, such as when an individual purchases solar panels from Swedish furniture behemoth Ikea.
According to Monday’s report, Ikea’s claim that it will be “climate positive” by 2030 translates to a real emissions reduction of just 15 percent this decade. The rest, it said, is based upon unclear rules on what are known as avoided emissions — products that can help avoid carbon pollution compared to equivalent products on the market, like Ikea’s furniture or its solar panels.
An Ikea spokesperson said: “We welcome dialogue and scrutiny of companies’ climate commitments and goals, such as net-zero targets, to ensure that these are aligned with the science of 1.5 C,” now considered the safe upper target for global temperature. “The new report by NewClimate Institute is a constructive addition to this.”
But the report concluded that Ikea could not credibly count the emissions it helps its customers save as its own savings. If it didn’t produce the panels, clients would simply buy them elsewhere.
“Imagine that you are a consulting firm, and you help your customers save money,” Pineda said.
“You would never include those savings into your own books and say, ‘Oh, look, we became profitable because we helped this other firm save money, right?
“Companies need to reduce emissions within the value chain,” he said. “That is the bottom line, there is no other way.”