Race to net zero
Companies are volunteering in droves to cut greenhouse gas emissions to “net zero” within the next few decades, Axios’ Andrew Freedman reports.
- But disagreement about what “net zero” actually means for corporations — and the absence of a regulatory entity to enforce the pledges —means investors, government officials and consumers have trouble discerning “greenwashing” from genuine commitments.
- In broad terms, “net zero” means the point at which the emissions from an entity, be it a company or a country, equals the amount of greenhouse gases being taken out of the atmosphere.
By the numbers: At least 695 of the world’s largest publicly traded firms had set such targets as of early this year — to be reached by 2050.
- Companies are responding to the increasingly clear and dangerous effects of climate change, which in many cases are directly affecting their operations.
- The C-suites of these companies are also motivated by consumer sentiment and investor pressure — plus the knowledge that regulators are likely to act in the near future.
Between the lines: While the definition of “net zero” is clear on a global level, it’s murkier for an organization.
- The lack of a formal definition means it’s unclear whether “net zero” for companies applies to just CO2 or all greenhouse gases, said Steve Smith, executive director of the Oxford Net Zero Initiative.
- Simon Fischweicher of the nonprofit Carbon Disclosure Project said it’s also unclear whether offsets — such as investing in forest restoration projects — can make up the bulk of a company’s emissions reductions.
Here’s how a few notable companies have handled their pledges:
- Stanley Black & Deckeris out ahead of the pack in setting a science-based emissions reduction target that is consistent with reaching net zero by mid-century, according to Fischweicher.
- Google says it went carbon neutralin 2007, and the company is working to get its data centers and campuses to run 24/7 on carbon-free electricity by 2030. The company hasn’t yet set a science-based target under the Science Based Targets Initiative. But Google will have new sustainability announcements in April, a spokesman told Axios.
- Microsoft has a strategy to become ”carbon negative”by 2030. In a sustainability report, published March 10, the company says Scope 3 emissions — which mainly come from use of its products — increased by 23% compared to 2020, even though emissions were cut from offices, plants and stores. Microsoft says it’s working on it.
