Shareholder representative As You Sow has released “Road to Zero Emissions: 55 Companies Ranked on Net Zero Progress,” a report ranking companies on their progress in aligning emissions reductions with the 1.5-degree Paris Agreement goal.
The report finds a significant number of companies are making progress in measuring and disclosing greenhouse gas (GHG) emissions, and many are setting GHG reduction targets, but the vast majority are not making progress in aligning year-on-year emissions reductions with global 1.5-degree climate goals.
Of the 55 companies ranked, only three companies — Microsoft, PepsiCo, and Ecolab — received an overall “A” grade, and only two companies, Alphabet and Apple, received an overall “B” grade.
“Approximately 84% of the assessed companies received total scores of “D” or “F”, underscoring that we have a long way to go toward net-zero progress,” said David Shugar, As You Sow’s Say on Climate initiative manager and lead report analyst.
The report also finds 64% of assessed companies are not yet reporting the full range of their Scope 3 supply chain and product-related emissions.
“The time for action is narrowing precipitously,” said Danielle Fugere, president of As You Sow. “The next few years are critical in achieving emissions reductions and setting a less catastrophic path for the global climate. To address the current gap between goals and action, As You Sow’s scorecard weights near-term, year over year, GHG emissions reductions as the largest scorecard component.”
The report also addresses the potential use of offsets to achieve reduction goals. Investors and standard setters, including Climate Action 100 and the Science Based Targets initiative, have highlighted the expectation that companies must take concrete action to reduce greenhouse gas emissions, and that carbon offsets should not substitute for actual reduction measures in the company’s value chain.
While 12 of the assessed companies have set net-zero goals across all scopes of emissions, none commits to avoiding the use of carbon offsets to achieve those goals. As a result, no assessed company received an “A” grade for the category GHG reduction targets.
“Carbon offsets cannot substitute for on-the-ground reductions by companies,” Shugar said. “To achieve net-zero emissions, companies must take action at the level of their own operations and supply chains. Purchasing carbon offsets will not solve the climate crisis.”