At COP26 in Glasgow, U.N. climate summit, both governments and business presented ambitious plans to reduce carbon emissions. But a closer look beneath the surface shows many corporate “net-zero” plans are not nearly as good as they sound.
The Net Zero Tracker, compiled by a team of non-profit organizations and research labs, assesses companies’ environmental commitments based on information made publicly available by businesses themselves. Recently, it was discovered that 622 out of the 2000 largest publicly traded companiesAccording to revenue, the net zero tracker team found that only 1% of global companies have committed to a netzero strategy. The Net Zero Tracker team found, however that many companies’ actual policies undermine any efforts to achieve zero-carbon operations. Often, that’s because they They do not include emissions from their supply chains, which can have significant effects.
Understanding the Standard Framework to Measure Emissions (also known as the The) is necessary to comprehend the first. Greenhouse Gas Protocol,This article identifies three main categories of business-related emissions: Scope 1 refers to direct emissions from controlled or owned sources such as company delivery trucks. Scope 2 covers indirect emissions—say, the generation of purchased electricity, steam, heating and cooling consumed by a company. Scope 3 includes all other indirect emissions that occur in a company’s value chain, anything from supplier waste to the use of the products it sells.
If a company does not include Scope 3 emissions in its carbon accounting, it’s essentially useless. For example, Walmart, the world’s largest retailer, has an official strategy to reach Zero emission by 2040. Yet, its plan excludes Scope 3 emissions—despite the fact that they make up 95% of the company’s emissions, According to the company.
“A lot of businesses and investors are setting these kinds of targets, and they’re doing it, arguably, for PR reasons,” says Thomas Hale (an Oxford University professor who contributed to the publication Net Zero Tracker. Sometimes it can even be considered a form Greenwashing is a strategy for convincing customers the public that an organization’s products, aims and policies are environmentally friendly, when they are often far from it.
A Walmart spokesperson said in an emailed statement that the company was working with its suppliers on a project to “avoid a gigaton of greenhouse gas emissions by 2030.” More than 3,100 of Walmart’s suppliers have formally signed onto the project and “avoided a cumulative total of more than 416MMT of CO2e since the program’s inception in 2017,” the spokesperson said.
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Saudi Aramco, the world’s largest oil exporter, and one of the biggest companies on the Net Zero Tracker, Scope 3 emissions weren’t included either. 2050 net-zero pledgeIt was announced last month. “Scope 3 is the responsibility of end users, regulators, policymakers and governments around the world,” Aramco CEO Amin Nasser said Oct. 23 at the Saudi Green Initiative conference. Aramco has not responded to the request for comment regarding this article.
Scope 3 emissions are sometimes not included by all companies. For example, another oil major—and the second-largest company on the Net Zero Tracker list—Royal Dutch Shell, has a net-zero plan which includes Scope 3 emissions from the fuel it sells, but does not include Scope 3 emissions from its non-energy productsChemicals, lubricants and bitumen. The company’s spokesperson (Soon to be ShellThe company plans to make it a net-zero emission energy company by 2050. “Achieving this target means we will be net-zero across all of our operations in the future, including the manufacturing of non-energy products such as lubricants and chemicals.”
Offsetting is another issue. Many companies attempt to continue doing business as usual and then offsetting their carbon footprint by paying third parties to plant trees that, in theory, sequester carbon, or investing in emerging carbon-capture-and-storage technologies. These both have their faults.
Report released In October by campaigning group Friends of the Earth argues that “nature-based solutions” to offset carbon emissions are founded on a flawed assumption that it is possible to trade off harm in one place with good intentions elsewhere. Each habitat is unique and irreplaceable, the report argues, and forms of short-term carbon storage like trees or peatlands are inadequate substitutes for leaving fossil fuels in the ground—a more permanent form of carbon sequestration. There are some According to studies,For example, large-scale planting of non-native trees in Canada or China has caused disturbances to natural ecosystems and worsened wildfires. It also depleted groundwater.
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Furthermore, it is difficult to control offsetting. As part of Shell’s “drive CO2 neutral” scheme, customers can choose to pay extra when filling their tanks. Shell uses this extra cash to purchase carbon credits that offset any emissions. The problem is that In August, the Netherlands’ advertising watchdog ruled that Shell’s advertising campaign was misleading, because it could not prove the scheme fully offset emissions.And finally, This article is available in English investigationby Greenpeace and Source Material last month revealed that two of Shell’s most prominent offsetting projects, which rely on reforesting initiatives in Peru, Indonesia and Scotland, do not demonstrate a clear benefit to the climate.
This is also true for the financial system which supports fossil fuels and polluting industries. On the third day of COP26, a coalition of 450 financial firms—including such influential names like J.P. Morgan Chase, Goldman Sachs, and Santander—130 Trillion in private capital has been pledgedTo invest to reach global net zero by 2050. But many of these financial companies don’t appear to be cleaning up their own houses. J.P. Morgan ChaseIt was last month that it was Take control of your investment and lending portfolios net-zero by 2050—however, according to Net Zero Tracker, the bank’s pledge only partially covers Scope 3 emissions. Santander’s publicly available plan, according to the Net Zero Tracker, is incomplete, as it does not make clear how proposed measures will reduce CO2 emissions, and There are no formal accountability plans.
Goldman SachsIt has made public commitments to achieving net zero supply chain emissions by 2030, and will finance emissions to achieve its goal by 2050. However, it depends on offsets to meet these goals. The bank’s CEO David Solomon has previously said Goldman Sachs would set interim business-related climate targets by the end of 2021, a spokesperson said.
A spokesperson for J.P. Morgan said in an emailed statement that it was setting carbon reduction targets for “key sectors” of its financing portfolio as part of its “Paris-aligned strategy.” Steps it is taking include “Scope 3 targets for Oil and Gas, and Auto Manufacturing; announcing a $2.5 trillion, 10-year sustainable financing target to support the development and scaling of the innovative technologies that we need to get the world on a path to net zero, and achieving carbon neutrality in our operations every year starting in 2020,” the statement said.
A Santander spokesperson said in an emailed statement: “Santander’s climate finance report provides detailed disclosures regarding our climate targets and strategy. We are committed to playing our part in achieving the objectives of the Paris agreement and will continue to provide regular, transparent updates on our progress.”
As companies scramble to declare their commitments to a net-zero future, greenwashing strategies will likelt become more commonplace as the global economy moves towards green energy, finance, and tech—and may be harder to detect. The U.N. has established a group that will police net zero commitments. This might make it easier to spot them. Antonio Guterres, U.N. Secretary General, stated last week that the group will make recommendations for him in the next year.
“We need to hold each other accountable—governments, non-state actors and civil society.” Guterres spoke on November 11. “Only together can we keep 1.5 degrees within reach and the equitable and resilient world we need.”