Net zero pledges EVAPORATE: 96% of Big Corporations walking away from climate commitments

09/09/2024 / By Olivia Cook

About 96 percent of Big Corporations that have announced major climate investment pledges are quietly stepping away from these significant commitments.

On Sept. 1, a report by Jo Nova revealed that a staggering 96 percent of major corporations are quietly stepping away from their climate commitments. Many of these companies, which once made bold promises to curb carbon emissions, are now backtracking on their goals.

Google and Microsoft, once seen as leaders in the push for carbon neutrality, have seen their emissions skyrocket – Google by 50 percent and Microsoft by 29 percent – over the last few years. Despite their pledges to reach net zero emissions by 2040, both companies have stopped highlighting their environmental efforts – suggesting a retreat from their ambitious targets. (Related: There is no climate emergency: Around 1,500 scientists and professionals oppose net zero CO2 policy.)

AIG, one of the largest insurance companies in the world, initially gained praise for its decision to stop insuring some of the most polluting fossil fuel projects. However, the company is now facing an investigation in the United States Senate for allegedly continuing to support carbon-intensive energy projects, contradicting its earlier promises. Lawmakers argue that AIG’s actions do not align with the goals of the 2015 Paris Agreement, which seeks to limit the rise in global temperatures by limiting carbon emissions.

The retreat of Google, Microsoft, AIG and other major corporations is part of a broader pattern. Amazon has also rolled back its goal to cut emissions from half of its shipments by 2030. Shell, a major oil company with a long history in the energy sector, has abandoned its plan to invest in global carbon-offset projects, like forest preservation. BP, another oil giant, has significantly scaled down its commitment to cut emissions by up to 40 percent by 2030 – citing the financial benefits of sticking with fossil fuels.

As more big companies quietly distance themselves from their climate promises, it raises concerns about the sincerity and effectiveness of their commitments to addressing global warming.

Climate investments falling significantly short of public pledges

Many big corporations have made bold promises to embrace sustainability, but new research from L.E.K. Consulting reveals that these commitments often fall short.

One of the biggest hurdles is the lack of alignment within leadership teams. According to the survey, 58 percent of executives report significant disagreements on how to prioritize immediate business needs against future ESG (environmental, social and governance) objectives.

This internal conflict is compounded by a lack of effective tools to measure progress – only 27 percent of companies have any enterprise-wide ESG key performance indicators in place and a mere three percent have a comprehensive set.

Without clear metrics, it is difficult for companies to track their progress or tie executive bonuses to ESG performance, which makes it harder to stay committed to sustainability targets.

External alignment with stakeholders is another significant challenge. About 34 percent of executives pointed out a lack of strategic alignment with external partners, while 33 percent cited internal cultural issues as a barrier to advancing their ESG goals. The lack of necessary skills and mindset within the organization further complicates decision-making and accountability.

When asked about the areas where their organizations are least prepared to achieve ESG goals, 43 percent of executives highlighted weaknesses in reward and incentive frameworks and 40 percent mentioned a lack of the right culture and leadership engagement.

Other challenges include a shortage of required skills, insufficient progress in understanding climate-related financial risks, and difficulties in integrating ESG factors into capital allocation.

Despite significant investments in sustainable products and services, the survey shows that many companies are still not making enough headway. Nearly half of the executives admitted that their current offerings do not fully support a sustainable future – reflecting the broader struggle to meet the lofty promises made in the name of sustainability.

Watch this clip from MSNBC that talks about whether major companies are truly living up to their climate pledges.

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