Does your Climate Pledge pass the integrity test?
Ambitious and confident pledge
Pressure from an ever-growing range of stakeholders – including regulators, investors, activists, employees and consumers – has resulted in most large organisations placing climate change response high up on their agendas.
Recent research conducted with members of Winmark’s Chief Sustainability Officer (CSO) Network suggests that organisations are taking on the challenge with determination – 94% of them have committed to a formal climate pledge, and three quarters have promised to achieve net zero or carbon neutral emissions.
This ambitious level of commitment is accompanied by a general air of confidence about winning the battle to reduce carbon emissions. The average target year to achieve emission goals is 2030, and three-quarters of organisations say they are already on (or even ahead) of schedule, and the vast majority (87%) say they are confident they will ultimately succeed in meeting their goals.
How pledges lack integrity
However, a recent report published by the Corporate Climate Responsibility Monitor sounds a note of caution about the integrity of the climate pledges that are being made. The report assesses the climate strategies of 25 major global companies, including many household names such as Ikea, Amazon and Google, critically evaluating their climate pledges against good practice criteria. The results claim that the companies’ net-zero pledges in reality amount to emission reductions of just 40%.
The shortfall is caused by companies – both intentionally and unintentionally – omitting crucial data such as excluding carbon emissions from specific regions or subsidiaries; or choosing start dates in the past when emissions were higher. The report is also critical of some carbon offsetting initiatives, such as those that rely on carbon dioxide removals from forestry and other nature-based solutions, arguing that biological carbon storage can be reversed and is therefore not permanent (e.g. when forests are cut and burned).
The integrity test
Based on the findings of the report, Carbon Market Watch has made a number of policy recommendations to promote good corporate leadership and avoid greenwashing, including:
- Companies should report absolute emission reductions separately from any emission reductions financed outside of their value chain, rather than one single aggregate number
- If companies compensate their emissions, they should avoid double counting emissions reductions already accounted for by a country towards the achievement of its climate goals.
- Companies should not compensate fossil fuel emissions with carbon stored in non-permanent carbon sinks such as forests or soil
In the light of the report’s findings, leaders responsible for climate strategy should review their current climate pledge goals and processes; and re-assure both themselves and their stakeholders that the targets and measurements they are using pass the integrity test.
To help bridge the gap between making a pledge and making a difference, Winmark has created the world’s first FREE community of Chief Sustainability Officers.