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Major global companies are avoiding meaningful climate action and are instead using false, misleading or ambiguous green claims, a new report shows.

The first Climate Corporate Responsibility Monitor assesses the pledges made by 25 of the world’s largest corporations, many of them household names, against a set of transparent quantitative and qualitative indicators. Due out on 7 February 2022, the report is a joint initiative between NewClimate Institute and Carbon Market Watch. The report was authored by NewClimate Institute and a set of policy recommendations based on its findings was written by Carbon Market Watch.

“As pressure on companies to act on climate change rises, their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their ambitions,” said NewClimate’s Thomas Day, the lead author of the report.

The ramifications of these outlandish claims are significant. “Greenwashing is not a victimless crime as consumers and decision-makers are fooled into thinking that companies are doing all they can to address their climate impact,” observes Carbon Market Watch’s Gilles Dufrasne, who authored the policy recommendations. “The world’s biggest companies have a huge responsibility to rise up to the challenge we’re facing. Today, they are failing to do so, and it is time that governments step in to regulate corporate claims and put an end to misleading advertisement.”

Net zero is not zero

The results were striking: the companies’ net-zero pledges in reality amount to future emissions reductions, often decades from now, of an average of just 40%.

These companies get away with publicising their misleading green claims by a variety of greenwashing tricks, using loopholes, omitting data, choosing start dates when their emissions were higher and creating their own fallacious measures of climate action. 

Some of the worst examples include household names such as Nestle, Carrefour, Unilever and E.On. 

Here are some examples.

Nestle

Claim: Emission reduction of 50% by 2030 compared to 2018

Reality: Emissions reduction of 18% by 2030 compared to 2018. The reduction in the claim appears to be made with a business-as-usual emissions forecast rather than the actual 2018 baseline. The calculation also excludes some sources of emissions

Google
Claim: Carbon neutral since 2007 and carbon free by 2030
Reality: Despite Google showing leadership in some aspects of climate action, this carbon-neutrality achievement actually excludes more than half of the tech giant’s emissions in 2020. Google’s emissions have increased over the past three years. The carbon-neutrality claim is largely derived through offset credits and the scope of the “carbon free” target is unclear.

Carrefour
Claim: Carbon neutral by 2040
Reality: Claim only covers less than 2% of their emissions – major sources are not covered and the claim only applies in selected locations – less than 20% of their stores worldwide.

IKEA
Claim: Climate positive by 2030
Reality: Emissions reduction of only 15%. The rest is calculated through unclear rules to account for the storage of carbon in IKEA furniture, which is not permanent, as well as for avoided emissions generated, for example, by IKEA customers who purchased solar panels.

Zero tolerance for greenwashing

Based on the findings of the Climate Corporate Responsibility Monitor, Carbon Market Watch has produced a package of policy recommendations to promote green corporate leadership and combat greenwashing. These include:

• Governments must ban corporations from making “net zero” and “carbon neutrality” claims today
• Companies must report absolute emission reductions separately from any emission reductions financed outside of their value chain, rather than one single aggregate number
• Companies must always provide consumers and investors with the full picture. 
• If companies compensate their emissions, they must 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.

 A joint letter to EU policymakers pressing them to adopt these recommendations will also be sent out on 7 February.

Note to editors

The Climate Corporate Responsibility Monitor will be released on 7 February during a virtual briefing.

You can register for the launch event here: https://www.eventbrite.com/e/untangling-green-business-from-greenwashing-in-corporate-climate-claims-tickets-257866183697 

The report is downloadable at this link: https://carbonmarketwatch.org/publications/corporate-climate-responsibility-monitor