Days after the United Nations issued a dire warning about climate change and the U.S. Department of Energy announced their ambitious Better Climate Challenge, a new report provides a sobering reality check about corporate efforts to address the crisis.
On Thursday, Shareholder advocacy organization As You Sow released Road to Zero Emissions: 55 Companies Ranked on Net Zero Progress, which ranked companies on their progress in aligning their emissions reductions with the 1.5-degree Paris Agreement goal.
“Approximately 84% of the assessed companies received total scores of ‘D’ or ‘F’’, underscoring that we have a long way to go toward net-zero progress,” said David Shugar, As You Sow’s climate initiative manager and lead report analyst.
Some Good News
The good news is that the report found “a significant number of companies are making progress in measuring and disclosing greenhouse gas (GHG) emissions, and many are setting GHG reduction targets, but the vast majority are not making progress in aligning year-on-year emissions reductions with global 1.5-degree climate goals.
But of the 55 companies ranked, only three—Microsoft, PepsiCo and Ecolab—received an overall “A” grade, and only two companies, Alphabet and Apple, received an overall “B” grade.
Running Out Of Time
“The time for action is narrowing precipitously,” according to Danielle Fugere, president of As You Sow. “The next few years are critical in achieving emissions reductions and setting a less catastrophic path for the global climate. To address the current gap between goals and action, As You Sow’s scorecard weights near-term, year over year, GHG emissions reductions as the largest scorecard component.”
“Carbon offsets cannot substitute for on-the-ground reductions by companies,” Shugar said. “To achieve net-zero emissions, companies must take action at the level of their own operations and supply chains. Purchasing carbon offsets will not solve the climate crisis.”
Advice For Business Leaders
Just The Beginning
Shugar said that "Emissions disclosures and greenhouse gas reduction targets are just the start of net-zero progress. Companies need to demonstrate year-over-year emission reductions aligned with maintaining global warming to 1.5 degrees."
"Achieving net zero doesn't mean simply purchasing carbon offsets. Companies need to first deeply decarbonize their operations and supply chain, and only use carbon offsets as a last resort to achieve net zero."
Don’t Wait
Fugere said that, “Investors are looking for actual emissions reduction progress from companies. Data may be imperfect, and 1.5 degree aligned targets may be aspirational for now, but companies know their greatest sources of emissions. The only wrong thing for companies to do is delay emission reduction action until they have perfects plans.”
