ESG-touting giants’ climate and net-zero claims criticized
Nestlé and Unilever are among 25 major multinational companies accused of misleading or exaggerating their pledges to combat climate change, according to a new study.
But Nestlé says the report contains ‘significant inaccuracies’ while Unilever says it shares ‘different perspectives’ on parts of the report.
The companies, along with Amazon, Apple and Google, have come under fire from the new Corporate Climate Responsibility Monitor, produced by NewClimate Institute and Carbon Market Watch. The monitor scrutinizes 25 major companies in differing sectors and geographies on the transparency and integrity of their climate pledges.
Companies’ climate pledges require detailed evaluation and most cases cannot be taken at face value, the report reveals. Only one company’s net-zero pledge is evaluated as having ‘reasonable integrity’, three with ‘moderate’, 10 with ‘low’ and the remaining dozen are rated as having ‘very low’ integrity.
‘We set out to uncover as many replicable good practices as possible, but we were frankly surprised and disappointed at the overall integrity of the companies’ claims,’ says Thomas Day of NewClimate Institute, lead author of the study. ‘As pressure on companies to act on climate change rises, their ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their actions.’
The minority of the evaluated 25 companies’ headline pledges serve as a useful long-term vision and are substantiated by specific short-term emissions reduction targets. While none of the pledges have a high degree of integrity overall, according to the report, family-owned Danish shipping giant Maersk comes top, with ‘reasonable integrity’, followed by Apple, Sony and Vodafone with ‘moderate integrity’.
But the report says the majority of the companies with net-zero or carbon-neutrality pledges fail to put forward ambitious targets. Many company pledges are undermined by contentious plans to reduce emissions elsewhere, hidden critical information and ‘accounting tricks’.
Overall, the analysis finds the headline pledges of Amazon, Deutsche Telekom, Enel, GlaxoSmithKline, Google, Hitachi, IKEA, Vale, Volkswagen and Walmart have ‘low integrity’ and those of Accenture, BMW Group, Carrefour, CVS Health, Deutsche Post DHL, E.ON, JBS, Nestlé, Novartis, Saint-Gobain and Unilever have ‘very low integrity’.
‘Absolute reduction’ in emissions
Nestlé tells IR Magazine, however, that its greenhouse gas emissions have already peaked and continue to decline. The Swiss company made $94.5 bn in sales in 2021 from its 2,000 brands in cereals, confectionery, baby food and pet care. It plans an ‘absolute reduction’ of emissions by 50 percent even as the company grows by 2030.
Benjamin Ware, global head of climate delivery and sustainable sourcing at Nestlé, says the firm’s net-zero Climate Roadmap has been validated by the Science Based Targets initiative (SBTi) and the work that went into it is ‘rigorous and extensive’.
‘We have engaged with NewClimate Institute to explain the data and methodology behind our strategy,’ Ware says. ‘We welcome scrutiny of our actions and commitments on climate change. But NewClimate Institute’s Corporate Climate Responsibility Monitor report contains significant inaccuracies regarding Nestlé’s climate change commitments and performance.
‘Our roadmap is a starting point, and we remain focused on delivering against our public ambitions now and into the future.’
A Unilever spokesperson tells IR Magazine that while the UK multinational consumer goods company has ‘different perspectives’ on some elements of the monitor, it welcomes external analysis of its progress. The company behind home care, food and beauty products used by more than 2.5 bn people daily, has started talking with NewClimate Institute to see how it can evolve its approach.
‘Unilever has a number of ambitious targets (including two approved by SBTi) and we remain on track to achieve them,’ the spokesperson says. ‘Our targets and approach are set out in our Climate Transition Action Plan, which was put to shareholders at our AGM last year. Of the votes cast, 99.59 percent were in favor of the plan.’
The spokesperson says Unilever believes transparent reporting of its progress is critical, ‘which is why we have responded annually to the CDP annual benchmarking disclosure since it was founded in 2010. For 10 consecutive years, Unilever has been awarded an A grade for climate performance from CDP. We make our disclosure available on our website and include extensive information within our annual report and accounts.’