Climate pledges insufficient to limit temperature rise: Study

The recently published report by New Climate Institute in collaboration with Carbon Market Watch on "Corporate Climate Responsibility Monitor" assessed the integrity of the climate strategies of 24 major global companies and found that the companies pledge to reduce just 15% of their full value chain emissions by 2030, or up to 21% under the most optimistic interpretation of their pledges.

This goes less than halfway to the 43% reduction in greenhouse gases that need to be delivered at the global level to limit temperature rise to around 1.5°C, said a New Climate Institute press release.

As in 2022, Maersk is the only company whose climate strategy integrity was rated as reasonable. The report found that the strategies of eight companies – Apple, ArcelorMittal, Google, H&M Group, Holcim, Microsoft, Stellantis and Thyssenkrupp – to have a moderate level of integrity, while the remaining fifteen companies have low or very low integrity, reads the release.

One of the report's authors, Thomas Day of New Climate  Institute, said, "In this critical decade for climate action, companies' current plans do not reflect the necessary urgency for emission reductions."

Regulators, voluntary initiatives and companies must place a renewed and urgent focus on the integrity of companies' emission reduction plans up to 2030, he said and added that the discourse on longer-term net zero should not distract from the immediate task at hand.

Beyond 2030, the net-zero pledges of these 24 companies touting their climate credentials are often misleading. They all claim to be on a pathway to "net zero" or "climate neutrality", which most observers would understand as a commitment to deep decarbonisation towards near-zero emissions.

Consensus in the scientific community – reflected in the likes of the SBTi Net Zero Standard and ISO Net Zero Guidelines – shows that delivering global "net zero" requires cuts in today's emissions levels of at least 90%, or 95%, for most sectors. But the report found, that the commitments made by the companies amount to just a 36% reduction in their combined GHG emission footprint, by their respective net-zero target years, the release reads.

This demonstrates a huge chasm between what the companies are currently committing to and what is needed to avert the most damaging impacts of climate change. Real climate leaders are struggling to distinguish themselves from those making much more modest commitments. A small minority of companies are making potentially credible commitments for deep decarbonization towards 2030 and beyond.

A key concern is that offsetting practices – are undermining targets and misleading consumers. Half of the companies– including Apple, Deutsche Post DHL, Google and Microsoft – make carbon neutrality claims today, but these claims only cover 3% of those companies' emissions on average.

The vast majority of emission sources are excluded from these claims, but this critical information is not clear in the marketing materials displayed to consumers, reads the press release.

The report found that at least three quarters of the companies assessed, plan to heavily rely on offsetting through forestry and land-use related projects in the future. This is problematic for two key reasons: the projects are fundamentally unsuitable for offsetting emissions; and the scale of carbon credit demand implied by these companies' plans would require the resources of 2- 4 planet Earth's, if followed by others.