(Credit: Pixabay)As You Sow, a non-profit foundation committed to promoting “corporate social responsibility through shareholder advocacy, coalition building, and legal strategies,” has released a scorecard assessing the progress of 55 of the largest US corporations in reducing greenhouse gas (GHG) emissions. The scorecard was developed in line with the Paris Agreement, and only three companies received a top score.
A majority of companies now measure and report some range of their Scopes 1, 2, and 3 GHG emissions and set some level of GHG reduction targets. Many have set net zero ambitions. The vast majority of company climate actions and GHG reductions, however, are not yet aligned with global climate goals.
The report scores companies including Microsoft, Apple, Amazon, and Walmart on their actions across three pillars for an Overall Net Zero grade — (1) climate related disclosures, (2) GHG reduction targets, and (3) GHG reductions — then rates them on a scale of A to F.
Of the 55 companies assessed, only three received an overall grade of A – Microsoft, PepsiCo, and Ecolab – and six companies scored an A when judged by emissions reductions. The vast majority of companies are not adequately reducing the full range of their Scope 1, 2, and 3 GHG emissions, according to the report. Twenty-one assessed companies have reduced Scopes 1 and 2 emissions in alignment with the 1.5-degree goal, but Scope 1 and 2 emissions represent 50% or more of total emissions for only two of these companies, Freeport-McMoran and Air Products & Chemicals Inc., showing that most companies are not taking enough action to reduce their most material emissions, according to As You Sow.
The report also shows that most companies are failing to disclose their emissions. While 90% of the assessed companies report Scope 1 and 2 operational emissions, far fewer disclose Scope 3 emissions, which include indirect supply chain and products-related emissions. Out of the 55 assessed companies, only 20 companies reported all relevant Scope 3 emissions as identified by the GHG Protocol.
The maximum number of points in the assessment was 18, and the most common grade given in the assessment was an F, with 26 companies receiving a score below 4. These companies include Amazon, Honeywell, Exxon Mobil, and Tesla.
This lack of disclosure may become problematic for some companies if the recent proposal by The Securities and Exchange Commission is passed. The proposed rules on reporting climate risk would require companies to include climate-related disclosures, including how Scope 1, 2 and 3 emissions impact their business operations and financial results.
