Errors in corporate emissions reports indicate that companies are not giving climate policies due diligence, but the Rocky Mountain Institute (RMI) expects public pressure will push corporate transgressors to double down on their accounting.
“These companies are pretending they care about the environment, but they can’t even add up the data,” Andreas Hoepner, a professor at University College Dublin’s Smurfit Graduate Business School, told Bloomberg Green. “It shows that their net-zero targets are just a big public relations exercise.”
Researchers from Ireland, Germany, and the UK scoured a decade’s worth of emissions reports that were voluntarily reported to CDP, a non-profit focused on environmental disclosure. The researchers found that roughly 30% of the companies’ reporting contained errors, rounding issues, or omissions.
“If companies were making simple rounding [errors], then you would expect regular mismatches that are equally spread between negative and positive mismatches,” University of Hamburg’s Schiemann said. “But this isn’t the case. While some reports are perfect, others are just not adding up.”
The worst offenders were also some of the biggest polluters, including colossal fossils Shell, Exxon, and Imperial Oil. In any given year, 39% of oil and gas companies’ reports had errors, reports Bloomberg.
Exxon, for instance, reported 120 million tonnes of Scope 1 emissions in 2016, but the data for the companies’ breakdown of gases indicated a total of 128 million tonnes. A company spokesperson said this was because the company included carbon dioxide, methane, and other greenhouse gases in its Scope 1 accounting, and “methane and other greenhouse gases were reported in a separate entry and so shouldn’t be counted twice.”
Notably, the researchers found no errors in data from Portugal’s Galp Energia SA, TotalÉnergies SE of France, and China’s Cnooc Ltd.
But although emissions reporting may not have been taken seriously enough by these companies in the past, RMI expects there will be changes in corporate approaches to emissions reporting.
The Snowmass, Colorado-based think tank anticipates several trends for corporate climate action in the coming year, such as financial institutions facing more pressure to substantiate climate pledges, and to publish and assess their net-zero transition plans.. RMI also expects better forward-looking data and metrics, that the focus on high-emitting sectors will “widen and deepen,” and that financial institutions will be held accountable for targets linked to “real economy” impact.
“As the ‘decisive decade’ continues, financial institutions will need to proactively finance real-world transformation, rather than achieving portfolio alignment on paper only,” RMI says. “Firms will need to adopt strategies that have the greatest probability of high impact, doing the things that matter most first and avoiding greenwashing.”