Greenwashing has a direct impact on achieving global climate change goals. The Corporate Climate Responsibility Monitor 2022 evaluated the transparency and integrity of 25 multinational companies’ climate pledges. The evaluation focused on four main areas of corporate climate action:
1. Tracking and disclosure of emissions
2. Setting emission reduction targets
3. Reducing own emissions and
4. Taking responsibility for unabated emissions through climate contributions or offsetting.
The 25 companies reported the GHG emission footprint in 2019 to be approximately 2.7 GtCO2e. It is equivalent to roughly 5 percent of global GHG emissions. Greenwashing slows climate efforts.
The Corporate Climate Responsibility Monitor reported that headline pledges made by these companies are often ambiguous. Emission reduction commitments are limited. It was found that “just 3 of the 25 companies – Maersk, Vodafone, and Deutsche Telkom have committed to deep decarbonization of over 90 percent of their full value chain emissions. The number of companies adopting greenwashing is a matter of great concern.
The surveyed 25 companies have committed to achieving net-zero status and zero-emission targets by a certain date. The evaluation found that the actual achievement of the 25 companies is less than 20 percent of their 2.7 GtCO2e emission footprint of their respective headline target years.
The monitor noted a gap between promises and achievements and pleaded with regulators to develop monitoring mechanisms. They ask for standard-setting initiatives that will help find ways to distinguish and segregate climate leadership from greenwashing.
Given the adverse publicity that companies resorting to greenwashing have received, it is clear that ethics and transparency are critical to brand building.
Sixty percent of the power generation in China is coal-based. It is the second-largest consumer of oil in the world. Forty-eight percent of CO2 emissions come from the power sector, and thirty-six percent from industry. Transport accounts for eight percent while building five percent. The country intends to drive efficiency gains by shifting away from heavy industry.
China is home to seventy percent of the global manufacturing capacity for electric vehicle batteries. Its solar photovoltaic (P.V.) capacity additions are larger than in any country. Energy efficiency improvements and electrification will help reduce emissions in the short term. Emerging innovative technologies, such as hydrogen and carbon capture, utilization, and storage (CCUS), are expected to mature and take over post-2030.
Electrification will decarbonize transport and buildings. Metro, light rail, electric buses, and high-speed rail will lower the energy intensity of passenger trips. Low-carbon fuels will help reduce road, shipping, and aviation emissions. Direct CO2 emissions in the building sector are projected to drop by more than 95 percent through electrification, clean district heating, and energy efficiency. Chinese companies will, therefore, also join others in achieving climate goals.
Climate change: Financial Risks and Opportunities