Ever since climate change emerged as an issue of significant public concern, companies have been making commitments to do something about it. They've pledged to go carbon-neutral, all-renewable, or cut emissions by such-and-such percentage by such-and-such future date. These announcements have often sounded impressive and some have been genuinely meaningful. But what they've accumulated in publicity, they've frequently lost in incoherency and incomparability. Because we don't have an agreed baseline for such announcements, it's hard to know if they're off-the-charts bold, or just so-so marketing efforts.
We're reminded of this reality by a new report from CDP (formerly the Climate Disclosure Project), which totals up the value of dozens of such climate pledges. In a major corporate survey, it received responses back from 1,089 companies, of which 85% have a target to reduce their greenhouse gas emissions. These commitments would mean cumulative cuts of 1 billion tons of CO2 by 2030, compared to current levels. But they're still only a quarter of the way toward to the levels implied by the international climate agreement in Paris last December. Only 14% of companies in the sample have set goals for 2030 or beyond. And just 9% have set targets in line with meeting a "2˚C pathway"—the long-held international target for limiting global warming to relatively safe levels.
"This baseline-setting report . . . shows that while many are already on the right path, there is still a large gap to close. With hundreds of companies [saying] they anticipate substantive changes to their business resulting from the Paris deal, we expect to see a shift to longer-term, more science-based targets in future years," says Paul Simpson, CEO of the CDP, in a press release.
The good news is that dozens of companies have aligned their targets with the Paris deal. Almost one hundred companies now have "science-based targets", including General Mills, Dell, and Sony. Others have shown that it's possible to decouple business growth and emissions. For example, Host Hotels & Resorts, a U.S. real estate company, cut its emissions 23% over five years and managed to raise its revenue 22% over the same period.
CDP notes that 700 large companies didn't reply to its survey, including Berkshire Hathaway, Facebook and Amazon. That may not be a sign of lack-of-action: Facebook, for instance, has pledged to use 100% renewable power (50% by the end of 2018). But it does make judging these companies against consequential yardsticks that much harder. The emerging standard is that companies measure themselves against global limits, not arbitrary ones.