Corporate Net Zero Pledges Add Up to Little More Than Zero

It wasn’t long ago that press releases announcing bold net-zero commitments were flying into editors’ email boxes. At times, it seemed like Deal or No Deal on Red Bull. We’ll be net-zero by 2050! Wait, no, 2040! We’re going for 2030!

But when one realizes that no one is trying to stand out by announcing a net-zero commitment by 2029, or is frank enough to admit a zero-emissions operation won’t become any company’s reality until 2031 or 2032, something is up.

Well, something is up. The problem many companies had is that their net-zero commitments have been rather John Kerry-esque, promising a zero-emissions future in part by relying on technologies that don't exist yet. Meanwhile, also like Kerry, we can expect companies and their comms departments to remind us that will have “already achieved success” while saying that “time is running short.”

The problem starts with the very branding of what “net-zero” actually means. To be fair, as a recent report from Accenture concluded, setting any sort of emissions target can help make a difference as the world attempts to avoid climate catastrophe later this century. Nevertheless, the same report concluded that more than 90 percent of the companies that have set net-zero goals are on course to fall short of those targets. It doesn’t take a lot of math to sort out that all those net-zero commitments are adding up — or shall we say, subtracting down — to something far from zero.

At a time when we keep hearing that “government can’t do it alone, the private sector needs to step in,” only a third of the world’s 2,000 largest companies by revenue have set any sort of zero-emissions goal for 2050.

At a time when the public increasingly distrusts institutions such as government — take a look at what is occurring in exhibits A and B, as in the U.S. and U.K. — setting ambitious targets only to fall short isn’t a way to win the trust of consumers. That’s particularly true of the millennial and Gen Z generations, which expect more from companies than simply ensuring that Wall Street is happy with their quarterly financials.

Outside factors could come into play, including next week’s U.S. midterm elections; the fact there won’t be a general election in the U.K. until early 2025, causing more angst within the nation; and countries across Europe continue to shift toward radical, right-wing politicians. Considering this, there could be far less of an appetite toward solving climate change as people demand a focus on inflation and other perceived problems such as immigration.

Getting back to Accenture’s report: While companies have a lot of catching up to do in order to meet their net-zero goals, the consultancy’s assessment offers some rays of optimism. Certainly, adhering to a zero-emissions framework can help — for example, companies that align with the Science-Based Targets initiative (SBTi). As the cliché goes, it’s a marathon, not a sprint. First-time marathoners need to establish a clear set of running goals and achieve a certain distance weekend after weekend. If they think they can run those 26.2 miles on the day of the race, it’ll be over by the fifth or maybe the 10th mile. The same can be said of companies’ emissions targets. The time to stop talking and announcing, and start doing, or stop emitting, was yesterday.

Further, the sheer numbers that are behind climate action are encouraging, but remember, they are numbers behind commitments, not actual spend and action. For example, more than 90 percent of global GDP is covered by net-zero commitments; the private sector worldwide has committed more than $130 trillion to such programs that seek to tackle climate change; and plans that are in tandem with the Task Force on Climate-related Financial Disclosures (TCFD) have increased four-fold since 2018.

But in the end, these are promises and commitments. They have not added up to accomplishments quite yet. To put it into layperson’s terms, rent is due. The earth is our landlord, and companies have been getting a free ride for decades. Promises to make it all better won’t change the fact that so far 2050, and even 2030, are proving to be years most of us aren’t looking forward to.

Image credit: Andreas via Pixabay