More than half of companies risk ‘net zero greenwash’, report says | GreenBiz

Companies are undermining their net zero climate pledges with corporate lobbying and trade association memberships, a new report from the London nonprofit InfluenceMap warns. 

The report evaluated 293 companies from the Forbes Global 2000 list and found that, among those with a net-zero emissions or similar climate target, 58 percent were at risk of “net zero greenwash” due to the disconnect between their targets and their lobbying against climate action. 

The report is a “wake-up call” for businesses, said Catherine McKenna, CEO of Climate and Nature Solutions and chair of the UN Secretary-General’s High-Level Expert Group (HLEG) on Net-Zero Commitments. “While companies are quick to showcase their climate commitments, too many of them are not backing that up with support for positive government policy on climate,” she said, adding that if companies lobby against climate action, “their net zero commitments are simply not credible.”

InfluenceMap’s definition of net zero greenwash is based on the UN HLEG “Integrity Matters” report from 2022, which outlines what companies should do to demonstrate alignment with net zero by 2050.

InfluenceMap used multiple sources to score companies on their policy influencing efforts, including positions on their websites or social media channels, quarterly investor calls, CDP disclosures and public government consultations. It then characterized companies as either “misaligned,” “mixed alignment” or “aligned” with the goals of the Paris Agreement. 

Unsurprisingly, “misaligned” companies earning a “D” or worse were predominantly in fossil fuel, automotive, airlines and extractive industries such as Chevron, Duke Energy, ExxonMobil, Southern, Delta Air Lines, Stellantis, Toyota, Glencore International and Nippon Steel Corporation. However, Home Depot, the Walt Disney Company and Kraft Heinz also earned Ds.

“That misalignment, that mixed message, is a liability,” said Anne Kelly, vice president of  government relations, at Ceres. “If you’re claiming to have a certain target or a certain goal, and then not doing the hard work of making sure that the legislation and the rules are in place so you can reach that target — it’s an increasing concern.”

Disney, for example, set net zero climate goals for its operations by 2030, but “appears to have very limited direct engagement with climate policy,” and belongs to both the US Chamber of Commerce and the California Chamber of Commerce, Will Aitchison, a director at InfluenceMap and the lead author of its study, told GreenBiz. Additionally, a Disney senior vice president is a board member of the California chamber. Both trade groups “strategically engage with negative positions on federal and state climate policies,” he said. 

‘A huge opportunity’

Kelly said that while being misaligned with climate goals is “a reputational risk,” it’s also “a huge opportunity” because many companies may be unaware of internal inconsistencies among their sustainability teams, their boards and the policies advocated by their government affairs offices. There’s also ample opportunity to engage in climate policy. 

While about a fifth of the companies fell into the category of “misaligned,” the majority (62 percent) were scored as “mixed alignment.” Companies in this group include Dow, Merck and BMW, which scraped by with D plus grades, as well as Microsoft, Nike, Unilever, Walmart, PepsiCo and Hewlett Packard, which earned B minuses. Companies scoring above a C plus conduct mixed policy engagement activities but are increasingly supportive of the Paris Agreement.

Many companies in this latter category were graded that way in part because of their membership in the Business Roundtable, which adopts some positive top-line positions but advocates negatively on key climate policy areas, Aitchison said.

Kelly agreed, citing the Business Roundtable’s failure to support the Inflation Reduction Act. “For many companies, the trade association is the ball and chain around their leg of climate leadership,” she said.

Fifteen companies scored as “aligned” with the Paris Agreement, including Apple, General Mills, GlaxoSmithKline, Enel, Danone and H&M.

Among other key findings, the report found a “very weak positive correlation” between the number of corporate web pages using the term “net zero” and positive climate engagement, concluding that many companies use the language of net zero without supporting climate policy. Emerson Electric and Lowe’s scored Ds but each owned more than 2,000 web pages with net zero terms. General Mills and PayPal, in contrast, earned Bs but had fewer than 20 net zero communications.

Another key finding is that only 8 percent of companies have set a climate goal adhering to the Science Based Targets initiative protocol. 

‘Grounded in science-based principles’

Aitchinson hopes the report will inform the accountability framework for corporate entities’ climate commitments being developed by the United Nations Framework Convention on Climate Change, ahead of COP28. “Our recommendation is, No. 1, that policy influencing should be included,” he said. “We also think that [corporate] disclosures should be grounded in science-based principles” and that there needs to be a process for independent verification, he said.

Corporate accountability is the subject of several side events planned for COP28, said Kelly, and at least one event will require companies to have scored B minus or better on the InfluenceMap report to be allowed into the room. 

“Corporate influence is a key reason why governments are failing to progress climate policy at the speed needed, and corporate,” said Aitchison. “Unless companies match their climate commitments with ambitious support for government-led policy action, the Paris Agreement goals will be impossible to reach.”

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