Big Business is Full of Hot Air

Big-name brands often make high-profile commitments to sustainability, yet their track records frequently fail to deliver on these promises. From tech companies to retailers, fashion labels, restaurant chains to car companies, businesses around the globe, are all keen to claim a newfound commitment to addressing their massive environmental impact and the climate crisis. With over 900 of the world’s 2,000 largest companies setting climate goals, how many of them are living up to these pledges?

Many companies have publicly, often with accompanying fanfare, committed to climate pledges and goals involving reducing carbon emissions or even reaching ‘net-zero’. For example, the Climate Pledge, founded by Amazon and NGO Global Optimism in 2019, has a goal of reaching net-zero carbon emissions by 2040. Since its inception, over 500 other big brand signatories have joined this commitment, including Mercedes Benz, Unilever, and Microsoft. 

Even the fossil fuel industry is not immune to making new zero pledges. In 2021 ExxonMobil announced their goal to achieve net-zero greenhouse gas emissions from their operating facilities by 2050. Critics argue that ExxonMobil’s plan lacks concrete measures and that its continued investment in fossil fuel projects undermines its net-zero commitment.  In 2020 BP announced a new strategy, aiming to become a net-zero company by 2050 and to significantly reduce its oil and gas production. Despite their expensive rebranding campaign and ambitious targets, BP has continued to invest in oil and gas projects. The company’s investment in renewable energy has been criticized as insufficient.

While these climate friendly promises sound like they are better than nothing, their actual effectiveness depends entirely on the action of their signatories and there are glaringly large issues facing ‘pledges’. So what is driving all this apparent corporate climate ‘concern?

Why The Sudden Climate Concern?

In a word, consumers. The public are demanding more environmental and social responsibility, especially younger generations. One survey found that 70% of American consumers want to know the environmental work that the brands they support are championing. These companies know that increasingly one of the most important things consumers look for in a brand is a ‘North Star’ mentality. The public wants to know brands are socially responsible and climate-facing. One way for companies to communicate their concern to the consumer is to make pledges and promises, outlining how they will enforce change to support the health of the planet in some way.

An Accountability Problem

In 2018 Coca-Cola famously pledged that its World Without Waste campaign aimed, by 2030, to recycle a used bottle or can for every single can and bottle sold. But in the UK alone, local authorities charged with collecting public trash reported that Coca Cola never contacted them about any form of can or plastic give back, collection or recycling scheme. Ever. 

Making pledges they don’t keep is not new for Coca Cola, back in 1990 they pledged to use around 25% of recycled material in their PET bottles, and by 2020 that figure was still only 10%. 

How can companies get away with not delivering on their promises? It’s easy – pledges are voluntary, meaning there is no legal regulatory framework forcing companies to achieve these ‘promised’ goals or even report on their progress in trying to reach them. In the case of Coca Cola, they realized that they would not reach their World Without Waste 2030 goal, so in 2022, they simply re-framed the original pledge. The new pledge announced that by 2030, their bottles will be made of 50% recycled material. That is far less than their original pledge which was claiming that all of their cans and bottles will be recycled by 2030. 

It’s not hard to spot a pattern emerging here: make a BIG loud pledge, drive positive media attention based on it and seemingly give conscientious customers what they want. Then, when they cannot deliver on their pledge, make a new smaller pledge and typically push the goal post back at the same time.

The Scope 3 ‘Scam’ 

Clearly, we need to look very closely at companies’ claims and their results before praising them for making a difference to the state of the planet. 

To start, what does the term “net zero emissions” even mean? When companies make goals of achieving net zero emissions, they are referring to the concept that the  emissions their business produces equals the amount of emissions they removed from the atmosphere through intentional action by the company. But the issue when companies claim they are going to do this is a lack of complete transparency. When reporting emissions, the standard used is the Greenhouse Gas Protocol, which has three different scopes. 

• Scope one measures emissions directly produced from company resources, such as company vehicles burning fossil fuel. 
• Scope two measures emissions indirectly produced, such as through electricity use in company buildings. 
• Scope three emissions measure all indirect emissions from upstream and downstream, the company’s entire chain; like emissions produced to make their product to emissions emitted when consumers use that product. 

The upstream supply chain refers to anything related to the creation of products, while the downstream supply chain refers to anything related to transporting products to consumers. Scope 3 emissions account for the majority of emissions produced, and since they represent such a wide range of a company’s impact, it’s extremely important that they’re disclosed. 

However, a 2023 research article from the Public Library of Science (PLOS) Climate journal describes companies not fully disclosing their Scope three emissions. Further, in a Bloomberg report on calculating carbon emissions, 63 companies accounted for 22 billion metric tons of Scope three emissions in a year. This was calculated to be around two thirds of all fossil pollution. Since there is no regulation with emission reporting, companies are free to decide what they report on in terms of their carbon emissions, which they frequently do based on just Scopes 1 and 2, leaving Scope 3 out. 

Another report from New Climate Institute and Carbon Market Watch describes 25 prominent companies that are each committing to reducing around 40% of their carbon emissions, as opposed to 100%, which of course does not meet “net zero” claims. Once again, the issue of underreporting Scope three emissions arises, with 8 of the 25 companies excluding downstream and upstream emissions. These companies get to make bold claims but the reality is far less impressive. 

Offsetting The Truth

Offsetting emissions is another  common approach, used by 24 out of the 25 companies studied in the New Climate report. Offsetting is when actual carbon emissions are ‘written off’ by companies investing in something else that removes carbon emissions, for example, a company planting trees to offset their freight emissions. 

The problem with offsetting occurs when companies routinely start to heavily rely on carbon offsetting as opposed to making any long term progress in finding solutions that lessen the source of their emissions in the first place. There are also concerns of credibility and effectiveness with offsets, meaning it’s often unclear when they work and when they do not and regulating ‘offsetting’ companies themselves, who plant the trees for example, has been patchy. 

Amazon has already taken some steps backwards on their climate goals to rewrite their pledges so that they exclude specific targets that they know they cannot or will not meet. Shipment Zero is a case in point. In 2019 Amazon’s goal was to make 50% of its shipments net-zero in terms of carbon emissions by 2030, but this aim was removed from their website in 2023, and instead absorbed into their net zero carbon goal for 2040. This was just four years after the original goal for 2030 was first announced. 

The Bottom Line

There should be a much more rigorous framework around the topic of accountability so that in the future when companies miss their pledges, they are forced to announce why with the same pomp and ceremony that they used to first make them. Business needs to come clean about the goal change and they need to explain it. The issue right now is that they can too easily hide their broken promises after benefiting richly from making loud claims they do not meet. With no regulation for this sort of ‘emission pledging’ and reporting, companies can just step back from their pledges and goals on carbon offsetting with little to no consequence.

We Want It All and We Want it Now!

The real problem is  overconsumption and the endless growth that businesses promote and push down our throats.  Already, Amazon is reporting that this year’s Prime Day was the biggest event they’ve ever had, with record sales. According to CNBC, consumers spent $14.2 billion during this one event, over 11% more than last year. Through all the sales and deals being advertised, consumers feel like they have to make immediate purchases so they don’t miss out. This results in mass overconsumption of unnecessary products. 

Billion-dollar companies rake in immense profits, yet their primary focus remains on increasing their earnings. If these corporations are genuinely committed to combating climate change and curbing global temperature rise, they must prioritize sustainability over corporate greed. It may sound impossible, but it’s achievable!

A Global Change

A future beyond our current economic mindset is achievable through adopting sustainable business models. This approach starts with efficiency—using fewer resources—and progresses to stronger sustainability practices, such as designing products for durability and reparability. Ultimately, it leads to a state of flourishing, where societal and environmental well-being take precedence over mere economic gain.

Governments can play a crucial role by implementing policies and laws that incentivize businesses to embrace more sustainable models. This can begin with mandatory climate pledges and goals for larger companies, rather than relying on voluntary commitments.

For such policy changes to occur, there must be a strong public demand for sustainability. The more we pressure both businesses and policymakers to prioritize these changes, the sooner they will be realized. Climate pledges are just the beginning; sustainable companies represent the future. Continuing with business as usual is not a viable long-term option. Make informed choices for the planet and your community by supporting businesses and policies that are committed to sustainability. Investigate which companies are leading the charge in making industries accountable, and vote and spend accordingly!

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