Every company that claims to be environmentally responsible sets targets for reducing its greenhouse gas emissions. General Motors says its manufacturing plants will reduce their carbon intensity by 20%. Wells Fargo says it will achieve a 35% reduction in greenhouse gas emissions from its buildings. UPS aims to reduce airline emissions by 20%.
These global corporations recognise the reality of climate change and are striving to become more efficient. While governments, including the US and China, the world’s two leading emitters, can’t agree on binding climate targets, it might seem as if some companies are doing their part.
Unhappily, most are not.
Corporate climate targets are almost never based on climate science. They are not designed to do what needs to be done – bringing global carbon emissions down to levels that will avert dangerous climate change. Instead, the corporate targets appear to be driven by internal considerations – what companies can achieve and afford, what their peers are doing, even what round numbers will fit into a headline or press release. No one promises to cut emissions by 23% by 2021.
However, there are some big companies who are doing their part to curb climate change. An analysis of 100 global companies by two non-profit groups, Climate Counts and the Center for Sustainable Organizations, found that 49 are on track to reduce carbon emissions "in line with scientific targets to avert dangerous climate change". That may not sound bad – those 49 companies are emitting what the study describes as "sustainable" levels of carbon.
But the 100 companies chosen for the study were selected because they have been tracking their emissions since 2005. In other words, they are leaders when it comes to transparency for climate change. A broader sample of companies would, it’s safe to assume, underperform this group. What’s more, just as the vast majority of the world’s big countries will need to co-operate to avert a climate crisis, so will the majority of the world’s big companies. Forty-nine out of 100 won’t get the job done.
Importance of context
But what do these emissions reduction targets actually mean? Mike Bellamente, the executive director of Climate Counts, offers this analogy:
"Assessing sustainability performance without context provides a limited view of reality. It’s as if I were to tell my wife, ‘Hey, I’ve reduced my cheeseburger intake by 20% from last year’ without telling her that my doctor advised me to abstain from cheeseburgers altogether if I’m to avoid having a massive coronary by the time I’m 40."
"We have to get companies to set science-based targets and get away from these arbitrary targets," Bellamente told the Guardian.
To see how companies set their emissions targets, I asked a half dozen companies that ranked near the bottom of the Climate Counts analysis how they did so. The responses were revealing.
Companies that are ordinarily eager to talk about their sustainability efforts offered regrets. A spokeswoman for Dow Chemical said that "as Dow is fully engaged with the Olympics at this point, unfortunately the company will not be able to participate in this opportunity." A P&G spokeswoman emailed: "Unfortunately, P&G is not available for this interview." UPS said that "Unfortunately, we’re going to have to pass on this particular story."
The other companies were at least more forthcoming.
Neil Tonge, global director EHS and sustainability at Molson Coors, said by email:
"Our targets are set with a determination to push the organization to maximize its potential using good business practices and current technologies, but also to ‘think bigger’ in adopting new technologies. Molson Coors has set targets in the areas it thinks are most relevant to its stakeholders and the business as a whole."
Dave Tulauskas, General Motors’ director of sustainability, said:
"The targets are set based on a couple things. First, we look at the aggressive reduction activities we achieved between 2000 and 2010. Energy intensity reduction was 49.4% during that time. Carbon emissions intensity reduction over the same time period was 45%.
Then we see what can still be accomplished by looking at upcoming planned projects, as well as potential new opportunities that are built into our 10 year business plan … Our targets will require us to stretch our capabilities and innovate."
Mary Wenzel, who heads environmental affairs at Wells Fargo, said:
"The target was developed by modelling what was relevant and possible in our current business; conversations with multiple internal and external groups, including Wells Fargo business leaders and team members, NGOs, and customers; an understanding of the scientific consensus of required GHG reductions; and our desire to demonstrate leadership in managing our own environmental footprint."
In fairness, it should be noted here that these companies’ sustainability programs go well beyond greenhouse gas reductions. Wells Fargo has promised to provide US$30 billion of financing by 2020 to businesses and projects that benefit the environment, while GM has put enormous marketing resources behind the electric Volt. These efforts are arguably more meaningful than their climate targets.
Yet the fact is that these companies and others are emitting unsustainable levels of carbon pollutants, at least according to the Climate Counts-Center for Sustainable Organizations analysis.
Of the 100 global companies ranked in the study, P&G was ranked number 90, followed by GM (92), Wells Fargo (93) Dow Chemical (95), UPS (98) and Molson Coors (99). Rounding out the bottom 10 were Cisco, Citigroup, Conagra, Royal Bank Scotland and Weyerhauser.
The Top 10 were Autodesk, Unilever, Eli Lilly, Canon, Loreal, GE, Reckett Benckiser, Abbott Labs, Hyundai and State Street.
Lack of robust metrics
Behind the rankings is a complex set of calculations and assumptions. The carbon reduction metric, which was developed by the Center for Sustainable Organizations with help from the Tellus Institute, is based upon a pathway of declining emissions that would stabilize CO2 concentrations in the atmosphere at 350ppm by 2100.
Some companies have used their own science-based methods for setting corporate climate targets. BT, the British telecom company, developed a methodology for target setting, which was followed by work at Autodesk, the software firm, which released a free, publicly-available program called C-FACT (for Corporate Finance Approach to Climate-Stabilizing Targets) in 2009.
Emma Stewart, Autodesk’s head of sustainability solutions, told me that the company came up with the program after she informally surveyed tech companies and their climate goals.
"I looked out at what was considered best practice at the time, and I was underwhelmed at how targets were set," she said. "None of it was grounded anywhere in science."
Five years later, little progress has been made – and remember, these companies are among those recognised as sustainability leaders.
As Mark McElroy puts it: "Most of what passes for best practice in sustainability measurement and reporting today falls short of the mark, precisely because it fails to take real social and environmental thresholds into account."
This is a modified version of a piece first published by the guardian