Corporate giants like Google, Amazon, Apple, Nestlé, Ikea, and Unilever stand accused of exaggerating the gains in their carbon reduction plans, in a scathing analysis that brands the Science-Based Targets Initiative (SBTi) as a “platform for greenwashing” that lets companies slip through the cracks.
The Corporate Climate Responsibility Monitor, published by the New Climate Institute and Carbon Market Watch, “finds that 25 of the world’s most valuable companies, which together accrued US$3.2 trillion in revenues in 2020 and accounted for 5% of global greenhouse gas emissions in 2019, have climate plans that are weaker than how they’ve been marketed so far,” Bloomberg Green reports.
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“The report says that nearly half of the 25 businesses, including Nestlé SA and JBS SA, don’t have specific commitments to reduce emissions by their target net-zero year,” Bloomberg adds. “The remaining 13 plan to cut emissions across the value chain by 40% on average, rather than fully axe them as their pledges suggest.”
Out of 18 companies that SBTi “had rubber-stamped as compatible with 1.5 or 2°C of global warming,” Climate Home News adds, the report concluded that at least 11 were “highly contentious”.
Of the 25 companies in the study, only three—A.P. Moller-Maersk, Vodafone Group, and Deutsche Telekom—are on track to near-complete decarbonization, Bloomberg says, citing the report.
SBTi Managing Director Alberto Carrillo Pineda told Climate Home he “welcomes stronger scrutiny”, adding that many of the issues identified in the report were addressed in a new net-zero standard the initiative introduced last October. But only one of the 25 companies reviewed by NCI and CMW, CVS Health Corporation, had been validated based on that standard, he added.
“Scrutiny helps us to create stronger methods for assessing and validating corporate climate targets,” Pineda told Bloomberg. “The report also exposes important gaps in the level of transparency and integrity of corporate net-zero targets.”
NCI was rather more scathing.
“Ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators,” lead author Thomas Day said in a statement. “We were quite shocked about the extent of creativity that some companies apply to claim a credible path to net-zero, and the amount of effort that it takes to reveal that.”
Climate Home cites SBTi as “the most prominent standard-setter for corporate climate targets globally, having endorsed more than a thousand as in line with international climate goals.” But NCI said the organization has a conflict of interest, since it receives up to US$14,500 for each validation report it produces. Even with those dollars in hand, the report questions whether SBTi is equipped to spot flaws in the carefully-crafted plans.
“Standard-setting initiatives should focus on the development of guidelines and standards, rather than pursuing the mass evaluation of individual companies with insufficient resources and conflicting incentives,” the report said. “This can otherwise lead to a platform for greenwashing.”
Bloomberg says examples of that activity include:
• Multinational grocery and convenience store chain Carrefour S.A., the world’s eighth-largest retailer by revenue, with an emissions reduction plan that left out branded shops and upstream and downstream emissions that account for almost all of its carbon footprint;
• Food and beverage multinational Nestlé and consumer products giant Unilever, which allow individual consumer brands in their expansive portfolios to lean on carbon offsets to reduce their footprints;
• Food processor JBS, which sets a 2040 deadline to power all its facilities with renewable energy, but provides no information on its current or future energy supplies.
Climate Home has examples of companies that received high ratings from SBTi, but low ratings in the NCI/CMW report, and documents the response from Nestlé and Ikea. Amazon, Google, JBS, Unilever, and Carrefour were among the other companies that defended their climate plans in response to media queries, Bloomberg says.
This is not the first time SBTi’s approach has faced tough criticism, Climate Home notes. Last March, former advisor Bill Baue published a formal complaint, telling Climate Home that “Science-Based Targets is not a science-based approach”.
With seven possible assessment methodologies to choose from, Baue said at the time, SBTi initially accepted an approach developed by the U.S.-based Center for Sustainable Organizations (CSO), before dropping it from its toolkit. As a result, “SBTi now finds itself in what we might call an ‘inconvenient’ position of recommending against the very methodology that is the most robust!” he wrote in his complaint.