Take JBS, the world’s largest meatpacker. For example, extracting the raw materials needed to manufacture a product. The largest share of emissions tied to a company’s business most likely happen somewhere outside that company. What are companies including in their targets? Setting and working through targets transparently is also key for shareholders and civil society to assess progress. “In some cases, it’s about understanding why certain strategies that you’re using may or may not be working,” she said. Pratima Divgi, who heads the capital markets department for CDP North America, said interim targets were useful for many reasons, not just measuring performance. Experts say any credible pledge should have short- and medium-term targets, too, for every five or ten years. Beyond that level, the dangers of global warming - including worsening floods, droughts, wildfires and ecosystem collapse - grow considerably.īut it’s a long way to 2050. That’s because of the scientific consensus that, if the world can stop adding carbon dioxide to the atmosphere by then, we should be able to hold warming to 1.5 degrees Celsius. Most pledges have 2050 as their target date. Some companies, like the ones in the fossil fuel sector, will need to radically change the core of their business models. Most companies will only be able to rely on these tools to offset 10 percent of their emissions at most. These uncertainties mean carbon offsets should be marginal in corporate plans, according to the standards set by Science Based Targets, a nonprofit group that assesses corporate goals. In addition, most of the technologies to remove carbon that’s already in the atmosphere are prohibitively expensive and not in use on any commercial scale. Forests that form the basis for carbon offsets are complicated because those forests can burn, releasing their stored carbon into the air and defeating the idea of an offset. Keep them in mind the next time you read about a corporate announcement.įirst things first: What do companies mean by net zero?īecoming carbon neutral involves two things: Companies need to decarbonize their business by lowering their emissions, and then compensate for the unavoidable emissions through carbon offset programs like reforestation projects and carbon removal technologies.īut, for now, compensating for emissions is often a gamble. In the meantime, here are some key points about what it takes for climate pledges to be credible. The United States Securities and Exchange Commission, for example, will meet on Wednesday to consider new rules that would standardize the way businesses disclose information about investments that claim to be green, sustainable or low-carbon. And regulators are increasingly focused on the issue. The ground rules for corporate pledges are still being written. You can think of these businesses as trailblazers, and, if we fail to recognize their efforts, they’ll have less incentive to do the hard work of actually reducing greenhouse gas emissions. CDP, a nonprofit group focused on corporate transparency, has identified more than 250 companies that it says are leading the way to a greener future. The group’s report said it’s “more difficult than ever” to distinguish between real climate leadership and dubious claims.īut, it’s very important to keep in mind that some companies are trying to do the right thing. The New Climate Institute, a research organization based in Germany, recently looked at the climate plans of 25 big multinationals and gave most of them very low marks on actually reducing emissions. It’s very likely that we’ll hear more climate promises.įirst, let’s talk about greenwashing - a blanket term to describe false or unproven claims in a company’s environmental records. It’s important because global business leaders will gather Sunday in Davos, Switzerland, for the annual World Economic Forum. Here’s why that would be bad, and what you should know about those big promises. We’ve been fed so many unsubstantiated claims (for example, on airline carbon offsets) and so much outright disinformation ( oil companies, I’m looking at you) that it would be easy to just dismiss them all. There are a lot of corporate climate pledges out there, and it’s easy to be cynical about them.
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