The majority of the world's largest companies have set their own greenhouse gas reduction goals, but their targets fall far short of what scientists says it necessary to avoid potentially catastrophic climate change.
In fact, the top global 100 firms as a group are running 39 years behind the schedule recommended by the world's leading climate scientists.
To meet the targets of the International Panel on Climate Change, the companies would have to double their rate of emissions cuts immediately and keep it up, according to new research from the Carbon Disclosure Project.
The CDP study found that the world's 100 biggest companies are on track to reduce their emissions by an average of 1.9% per year right now. That's well below the 3.9% annual reduction they would need to reach the IPCC's recommended cuts of at least 80% below 1990 levels by 2050.
"If we were all to continue on that trajectory, we would not achieve the required reductions until 2089, 39 years too late. The consequences for the climate could be dramatic," the authors write.
Part of the problem is a lack of global standards and long-term international goals. The current goals are voluntary – 73 of the top 100 have disclosed some sort of reduction target, with European companies, facing an emissions trading scheme and EU-wide reduction goal, tending to be the leaders. Still, each corporation has set its own target in its own way. Some look at absolute carbon dioxide equivalent emissions reductions. Others measure carbon intensity. Still other corporations focus on energy efficiency.
IBM, for example, has a 2012 emissions goal of cutting CO2 by 12% from 2005 levels, plus a goal of cutting energy consumption by 3.5% each year. L'Oreal has a goal of cutting its greenhouse gas emissions by 2% each year and reducing its energy consumption by 5%. Cisco's goals include a 25% emissions cut from 2007 levels by 2012 and reducing business air travel by 10% from 2006 levels by 2010.
Those voluntary corporate targets are rarely driven by the recommendations of science, the study says. Instead, the CDP found in its surveys and interviews that the market is the driving force.
"As a result, Global 100 targets often fail to deliver the required cuts," the authors write.
The study also found evidence that the Global 100 aren't inclined to take major steps without political leadership.
Only 16% of the companies have greenhouse gas reduction targets that extend beyond 2012, the year the Kyoto Protocol expires. That suggests they're waiting to see what targets and rules arise from the UN meeting at Copenhagen in December.
Whether those new international targets and rules written at Copenhagen end up at a level in line with science remains to be seen.
At an international negotiating session in Bonn earlier this month, Yvo de Boer, head of the UN Climate Change Secretariat, told reporters that negotiations were moving too slowly and that the promises made by industrialized nations so far are "miles away" from what's needed to meet the IPCC's 2050 goal.
The IPCC calls for industrialized countries to make mid-term emissions cuts of 25% to 45% below 1990 levels by 2020 to keep atmospheric CO2 below 450 ppm. Many scientists and policy experts say that still isn't enough. Even IPCC Chairman Rajendra Pachauri now says he personally supports a goal of 350 ppm.
Yet several industrialized companies are having trouble accepting the 450 ppm mid-term goals. Canada's target is 20 percent below 2006 levels by 2020. In the United States, the American Clean Energy and Security (ACES) bill that passed the House calls for 20 percent below 2005 levels by 2020, and it would allow 8 percent to be met by energy efficiency measures.
"Industrialized countries need to show a greater level of ambition in agreeing to meaningful mid-term emission reduction targets," de Boer said.
"A climate deal in Copenhagen this year is an unequivocal requirement to stop climate change from slipping out of control."
There are other effective pressures on companies to cut their carbon emissions, including the increasing pressure placed on companies by their shareholders.
This spring, Idaho Power agreed to set greenhouse gas reduction goals after 52% of its shareholders voted in favor of a resolution asking the company to reduce its emissions. That vote sent "a loud and clear message that investors, in light of impending climate regulation, are no longer asking how much it will cost to reduce carbon, but instead how much money their companies can make doing it," said Lauren McLean, portfolio manager with Trillium Assets Management, which led the IdaCorp shareholder effort along with Calvert Group and As You Sow.
So who are the laggards when it comes to still taking that first step and setting a carbon-reduction target?
The CDP study found carbon-reduction plans in most of the low-emissions sectors, such as health care and the financial industry. All five of the electric utilities in the Global 100 were on board, too.
When it came to the energy sector, including oil and gas, however, only about half of the companies had carbon reduction targets. (see pdf attached below for details on each of the 100 companies' targets and time lines.)
"The level of climate debt is now so high that we are on the verge of a climate crunch, as large in scale as the onset of an ice age – but in the opposite direction," says Chris Tuppen, chief sustainability officer at BT, formerly British Telecom, which worked on the study with CDP.
"We urgently need to reduce the amount we are 'borrowing' (i.e. emitting) every year."
The CDP issued four recommendations with its report:
- Every company should set a greenhouse gas reduction target;
- the target should have a clear baseline and target year;
- the targets should reflect the recommendations of the IPCC;
- and government leaders meeting at Copenhagen must agreed to clear medium and long-term goals to set a framework for business to follow.