Revealing the Reality of Global Corporate Climate Actions

Businesses, especially major corporations, hold a significant responsibility to transform their industrial practices toward sustainability. Their long history of harmful practices that seek only profit has been negatively impacting the environment, overall industries, and people in the workforce. As awareness improves, legal and organic demand for sustainability pushes companies to include climate initiatives in their frameworks. A recent report sheds light on the reality of major corporate climate actions and commitments around the world.

Corporate Climate Responsibility Monitor

Published by the New Climate Institute, the Corporate Climate Responsibility Monitor (CCRM) assessed the climate strategies of 51 major global companies. It aims to measure how well these companies are fulfilling their responsibilities to people and the planet by evaluating their climate actions and commitments against established standards. 

The corporate sectors covered in the report are automotive manufacturing, electric utilities, fashion, and food and agriculture. In 2022 alone, these sectors collectively generated $6.1 trillion in revenue and accounted for 16% of global greenhouse gas emissions. The 2024 CCRM report rates companies’ climate commitment efforts on a scale from “High” to “Very Poor” to assess their integrity.

Insufficient Corporate Climate Actions

While the Corporate Climate Responsibility Report 2024 notes some improvement in companies’ commitment compared to the 2022 report, these targets remain insufficient to align with the global climate action pathway of limiting the rise in global temperature below 1.5°C.

The report reveals that the climate goals set by 51 companies for 2030 average only 30% of total emission reduction, with the most optimistic scenario projecting just a 33% reduction between 2019 and 2030. These targets fall significantly short of the global minimum requirement of a 48% reduction across sectors. 

Many companies’ 2030 and net-zero targets are unclear or only promise minimal emission reductions. Often, these targets lack transparency due to various issues like leaving out certain emission sources, using inconsistent base years, failing to update base year emissions, or providing inadequate context.

Moreover, it’s reported that only four companies are making substantial progress from mere pledges to concrete action. The efforts include targeting methane emissions reduction from fresh milk alongside a push for plant-based products, scaling up renewable energy capacity, and investing in zero-emission vehicles and sustainable materials. 

However, the fashion sector, in particular, falls short in presenting convincing emission reduction strategies, largely emphasizing renewable electricity without tackling issues like overproduction or fast fashion practices.

Reliance on Questionable Solution

Many companies are turning to what are considered questionable solutions, such as Carbon Capture, Utilization, and Storage (CCUS), standalone Renewable Energy Certificates (RECs), bioenergy, and carbon dioxide removals instead of focusing on actual emission reductions. 

Several companies like Nestlé, Danone, Nike, Stellantis, and Volvo Group are stepping away from past claims of carbon neutrality and improving transparency in their climate communications. However, only a few are dedicated to phasing out fossil fuels.

Out of the 20 examined companies, only four claimed carbon neutrality for specific products or parts of their operations using carbon credits in 2022 or 2023: Daimler Truck, Danone, Mars, and Volkswagen Group. However, these claims were deemed to have very poor or unclear integrity. Each claim addresses only a portion of the company’s emissions, and none of them offer evidence that the carbon credits they utilize sufficiently offset their own emissions.

Call for Recommitments and Tangible Efforts

Although there has been some progress in corporate climate actions, the report highlights substantial disparities in emission reduction targets and concrete actions among them. While a few companies are slowly advancing toward sustainability, many others are falling behind with unclear or inadequate commitments.

Looking ahead, it’s crucial for corporations to prioritize authentic emission reductions, improve transparency in their climate communications, and align their strategies with the global climate action pathway to mitigate temperature rise. Only through unified efforts and stronger commitments can corporations adequately contribute to tackling the climate crisis and fostering a more sustainable future for all.

Read the full report here.

Editor: Nazalea Kusuma