The largest companies have moved faster than governments in committing to ambitious carbon targets. Maybe COP26 should be targeting business leaders as well as government leaders.
Over the next two weeks, thousands of people will descend on Glasgow and join online the UN Climate Change Conference – COP26. Their goal: to slow down climate change.
The main event is the World Leaders Summit. UK Prime Minister, Boris Johnson, has invited the heads of state to coordinate action on climate change.
What’s needed is not just an event for the heads of state, but an event for the heads of Big Business. Some businesses are as large as some governments. Walmart’s annual revenues would rank it 22nd among countries’ GDP, above Sweden, Poland and the United Arab Emirates. What’s more, the largest businesses emit the most amount of carbon.
Big Business Emits the Most Carbon
According to Climate Action 100+, 80% of corporate carbon emissions can be attributed to just 167 companies. Oil and gas companies, such as Exxon and Chevron, are among the worst offenders. If these big businesses set ambitious carbon targets, they could lead the way to meeting the Paris targets to limit global warming to 2 degrees Celsius.
Big Business Has Made Ambitious Carbon Commitments
Over the last few years, carbon commitments have been a big topic in corporate boardrooms and executive suites. And, businesses have responded quickly and decisively. Here are the commitments made by the largest 50 companies in the S&P index:
- 45 of 50 companies submitted CDP Response Disclosures, which asks companies to report their carbon disclosures. Who didn’t submit? The twolargest oil and gas companies, Exxon Mobil and Chevron, as well as Berkshire Hathaway, Tesla, and Broadcom.
- 31 out of the 50 companies committed to terms such as “Net Zero”, “Carbon Neutral” or “Zero Emissions”. Not surprisingly, the same companies that did not report to the CDP also did not seek such high standards, but there were many others as well. One of the biggest surprises was Costco, which is often seen as socially progressive among big box retailers.
- 28 of 50 companies set science-based targets according to the Science-Based Target Initiative (SBTi). In an earlier Forbes.com article, I argued that SBTi was one of the highest benchmarks of the seriousness of the carbon commitment.
- 23 out of 50 companies explicitly said they will use carbon offsets to meet their climate commitments. This means that they are unable to reach zero carbon emissions in their own operations, so they pay others to do so. Only four of the companies that indicated they would use carbon offsets disclosed the source, and we know not all carbon offsets are the same.
- 31 of 50 companies invested in off-site renewable purchases, including renewable energy credits-RECs, and 28 of 50 invested in power purchase agreements (PPAs).
- 28 of 50 companies used the CDP Supply Chain Survey to engage their suppliers.
Big Business Is Acting In Spite of Government Inaction
The fact that 62% of the 50 largest S&P companies have stepped up to net zero targets in just a few years is remarkable. Given the climate policies of most of the world’s governments are deemed “insufficient” by watchdogs like Climate Action Tracker, Big Business may just be better able to stall climate change more quickly than Big Government.
So, why isn’t Big Business at COP26?