The New Climate Institute, a think tank dedicated to environmental policies, has recently made a study into 25 corporations that includes some of the biggest companies in the world.
Its findings detail how many are failing to meet climate change targets that they’ve been set. There are many suggestions that some corporations regularly lie or exaggerate the progress they have made in regards to carbon emission developments.
Google, Amazon and Apple lie among these firms.
If this is the case, the goal of reaching net zero by 2050 seems as impossible as ever.
Net zero refers to the balance between carbon emitted and carbon removed into and from the atmosphere. Scientists believe it is crucial to reach net zero by 2050 in order to limit temperature rises.
Inevitably, the corporations mentioned in the report have declined such claims, and disagree in the reporting methods.
Nestle queried its accuracy of the report in its statement saying they “welcome scrutiny of our actions [...]. However, the New Climate Institue’s Corporate Climate Responsibility Monitor (CCRM) report lacks understanding of our approach and contains significant inaccuracies”.
The CCRM looks at each firms’ publicly stated strategies to reduce greenhouse gas emissions in order to reach net zero.
The study also ranks the companies on integrity, assessing factors like annually disclosing emissions and a breakdown of them.
All firms had a way to go, with no one receiving a rating of “high integrity”. Nestle and the multinational consumer goods company Unilever, that owns many brands such as ‘Ben & Jerry’s’ and ‘Dove’, are ranked as having “very low integrity”.
The report concluded that even if the strategies in place were implemented, carbon emissions would be reduced by 40%, a massive 60% short of the 100% goal.
Therefore, it is reasonable to ensure that wider action needs to be taken in regards to tackling climate change.
Although Government intervention can cause market failure (when goods and services are inefficiently distributed around the market), severally policies and schemes have been implemented to reduce carbon emission.
One successful method is an Emission trading scheme, used by many countries and groups such as the EU.
Emission trading schemes release a fixed number of permits to businesses. These permits give firms a legal right to emit a certain amount of carbon.
However, due to the limited number of permits, some firms find they need more permits as they cannot cut down on carbon emitted cheaply. Others will find they can or are polluting less carbon than their permit allows them to, and so can sell their permits.
This creates a market for pollution permits and encourages innovation in regards to emissions without causing a detrimental cost to businesses, whilst reducing the total amount of pollution.
Although, it must be noted that this scheme is not perfect and does not have its costs. Due to the ease for businesses to cover up the real amount of pollution emitted, permits do not provide a wholly effective limit, and thus may not cause pollution levels to fall to the desired amount.
This all comes back to the integrity of firms, and highlights the difficulty in directing firms to produce at the social optimum rather than the private.
Written by Charlotte Hurst
Research compiled by Jonas Theaker