A report out this week from the Corporate Climate Responsibility Monitor assesses the climate strategies of 25 major global companies – and for the most part finds them wanting, with not one single company achieving the top score, which is calls High Integrity.
And only one of those companies, shipping specialist Maersk, achieved the next level up of aware of “Reasonable Integrity,” due to its proactive efforts in the transport sector to decarbonize shipping emissions, mostly from bunker fuel, which accounts for 63% of its total emissions.
While the company does not yet provide a clear trajectory to decarbonize, the report puts this down to the low availability of alternative fuels so far. It has set emission reductions from terminals by 70% by 2030 and the emission intensity of shipping activities to fall by 50% in the same period. The company has already openly called for a carbon levy for the shipping sector, to be targeted at all of its rivals including itself. The report is organized alphabetically and right underneath Maesk is Nestle, the Swiss food giant, one of the worst reported, which had 113 MtCO2e of emissions in 2018, with 58% coming from sourcing ingredients and 37% from downstream emissions.
Nestle has identified measures to cut emissions, but its targets and offsetting claims are considered misleading, and this undermines the company’s strategy. The report complains that it uses misleading terms regarding offsetting claims and that the company’s position on offsetting remains undefined. It says for instance that it does not pursue this at a company level, but then consumer brands are already claiming they are carbon neutral, when the company knows they are not. As a result Nestle gets one of the worst scores marked as “very low integrity.”
Three companies who get a decent report, just under Maersk are Apple, Sony and Vodafone. Most of Apple’s climate footprint is due to upstream emissions, especially through the purchase of goods and services it buys to make products, but by putting pressure on suppliers Apple has cut these by 29% from 2016 to 2020. It has comprehensive plans for more reduction, but once again like so many, its targets and carbon neutrality claims are a bit misleading. Like its claim that it has 100% renewable electricity but there are transparency issues the report says. Apple gets lots of its energy from renewable facilities and even runs 10% of these installations directly, 3% from projects in which Apples owns equity but most of it, some 87%, from PPAs. Apple still uses some renewable energy credits though this is only around 1% of its total supply.
Sony has its own Road to Zero strategy and a zero-emissions target for business operations and products by 2050. But it uses a lot of offsets, which simply leave more non-renewable energy left for everyone else and it is not fully clear on how it plans to achieve zero emissions. It has however joined the RE100 group, all committing to use only renewable electricity by 2040 but has only so far achieved a 7% share of renewable electricity consumption to date. It seems unfair to Apple to lump these two companies into the same category.
Sony claims it operates with renewable energy at key locations, in China, Japan, Thailand, Europe, and North America. But sometimes it procures this through PPAs, bout others it buys renewable energy certificates for offset.
Vodafone says it plans to offset 5% of baseline Scope 1 and 2 emissions to meet its target of net-zero own emissions by 2030. Again it relies on RECs, which may not incentivize additional renewable electricity generation capacity or lower emissions levels at all. Vodafone has PPAs in Spain and the UK, but the procurement of RECs is currently the main instrument for claiming the use of renewable electricity. Again unfair to Apple to put Vodafone in the same category as Apple.
Under the category of low integrity we find energy and car companies Enel, Volkswagen and BMW.
Enel is pushed back to this level simply because it still supplies natural gas to millions of homes in Italy and Spain and it still has not said how it plans to get out of this. It has a clear statement each quarter on how many new renewable electricity projects it has acquired and when it will retire fossil fuel plants, but gas is a problem it simply has not solved. It also has continued using gas turbines in its electricity supply, and it has not said when these will be closed, instead focusing on getting out of coal.
Emissions from the Volkswagen Group are mostly when people use its cars, (76% of 2020 emissions) but some is from goods it purchases (16%). The entire Volkswagen Group pledges to become carbon neutral by 2050. It already claims carbon neutrality for specific vehicle production lines by buying nature-based offset credits which are unsuitable for this purpose due to permanence issues. Although it has set interim emission reduction targets, VW has not committed to phase out internal combustion vehicles in line with a 1.5°C compatible decarbonization trajectory. We can help there, people are changing to EVs so fast, that pretty soon VW won’t be able to fob them off with internal combustion engines, a kind of involuntary zero emissions strategy.
The report says that VW’s headline climate target is unsubstantiated and not 1.5°C aligned and instead it says it is committed to a 2°C of warming target, which sounds to us like a rejection of the IPCC 1.5°C target. VW discloses almost no detail on its renewable energy procurement strategy, which makes it almost impossible to take its pledges seriously. It is building its own renewable energy facilities for some plants, which is seen as good practice, and the rest is from third parties or it uses energy attribute certificates, a practice with dubious impact.
BMW claims to already use 100% renewable electricity since 2020 but relies mostly on lower quality renewable energy procurement which does not guarantee that it is renewable. Some 75% of its total renewable energy procurement is through RECs, which are highly uncertain, and to top it all BMW says it will use carbon offsets and is perfectly aware how dubious this sounds, but can offer nothing better.
Finally German energy firm E.ON does not yet demonstrate sufficient ambition to decarbonize and despite it heavily publicizing renewable energy, it is fossil-fuels which underpin the majority the company’s sales. Like ENEL it has no clear plans to phase out gas supply. In some countries, renewable electricity is promised to residential customers at no extra cost, but the climate impact associated with some of those tariffs and claims is contentious the report says, mostly RECs.
If this is the best that 25 major firms can do, where each of them relies on revenue from consumers which regularly vote in favor of renewables at between 70% and 80%, then all of them can expect a dumpy ride at some point in the future. It seems most of them are simply greenwashing.