Obama at the 2015 climate roundtable. Photographer: Aude Guerrucci / Pool / Bloomberg

Time’s Up on Corporate America’s 2020 Climate Goals. Here’s the Results

By Todd Gillespie, Hayley Warren and Tom Randall

December 15, 2020, 12:00 AM EST

Scores of companies around the world have pledged to get to net-zero emissions, urged on by investors and consumers alike. In most cases, though, this ultimate climate ambition won’t be achieved until mid-century, give or take a decade. That makes it hard to judge the ability of business leaders to hit their targets.

But it wasn’t too long ago that 2020 was seen as a milestone like 2050 is now—at least for smaller-bore sustainability goals. Five years ago, a swath of U.S. companies set 2020 as a deadline for improvements in renewable energy, resource conservation and emissions reduction. We know this because a group of leaders from across corporate America answered a call from the Obama administration in 2015.

The initiative took on a clunky government name: the American Business Act on Climate Pledge. Chief executive officers such as Johnson & Johnson’s Alex Gorsky and Pacific Gas and Electric Co.’s Anthony Earley converged on the White House for a roundtable, and the president challenged them to set aggressive goals. More than half of the companies put forward quantifiable five-year targets, and some set multiple goals covering energy, emissions, and waste.

Their deadline has almost arrived. It’s time to check their work.

Bloomberg Green analyzed 187 different climate pledges meant to be voluntarily fulfilled by 2020 or earlier. The good news is that most of these pledges—138, so far—have already been met or appear on track by year-end, in part because many companies set modest goals.

Goals set as part of the American Business Act on Climate Pledge 👆

Note: Pledges have been summarized for brevity. Bloomberg LP, the parent company of Bloomberg Green, participated in the American Business Act on Climate Pledge and is on track to meet its 2020 goals. Graphic excludes four targets set by Bloomberg LP.

More concerning is that for a tenth of these goals, the businesses would not provide data on their progress. Thousands of the biggest global companies still don’t reliably publish data on climate risks or set targets to reduce them.

None of the companies who made five-year pledges could have predicted a once-in-a-century pandemic. The economic fallout from Covid-19 may put some shorter-term emissions goals in reach as cities shut down and factories stop churning, but the worldwide dip in carbon emissions will be temporary. Data collected for this project were mostly drawn from 2019, which doesn’t reflect the pandemic’s impact. The analysis excludes targets that have been revised significantly since 2015.

With fewer visitors to Las Vegas, for instance, MGM Resorts International has significantly reduced energy consumption at the largest casino and hotel complex on the city’s famous strip. Corporate travel has essentially ground to a halt, which will help biotech company Genentech far exceed its modest goal of reducing transport emissions by 10% from 2010 and professional-services firm KPMG surpass its target for reducing emissions per employee in its U.S. unit.

That measure had been rising sharply before the pandemic—up 56% since 2015—putting the company on track to miss its goal. But because of global travel restrictions, the company estimates it will now exceed its target. KPMG said it is “looking to lock in many of the sustainability gains we’ve made as a result of the pandemic,” which will move it closer to a commitment to reach net-zero emissions by 2030.

Most businesses that made five-year plans promised to reduce their carbon emissions only from their own operations, such as heat in offices or power in factories—called Scope 1 and Scope 2. But since 2015 it’s become increasingly popular to set more all-encompassing commitments that address what’s known as Scope 3 emissions, covering a company’s supply chains and customers. Reaching these targets sometimes involves changing consumer behavior. Big-box retailer Best Buy Co. is now trying to reduce customers’ energy costs by selling more energy-efficient products. Prologis Inc., the warehousing giant, is working to reduce its tenants’ carbon emissions.

Pledges to reduce greenhouse gas emissions by 2020 👆

Change in emissions from baseline year
Achieved early
On track

The decades required to achieve grand, long-term aspirations such as carbon neutrality make it crucial to set achievable, nearer-term objectives. That’s the best way to check progress and a necessity for recognition by leading authorities such as the Science-Based Targets initiative (SBTi), a collaboration among top climate organizations.

One reason it helps to have preliminary steps is to make it easier to determine how much a company may need to rely on carbon offsets to meet its goals. Offsets give companies a way to balance their emissions against financial contributions toward helpful activities, such as planting trees. The SBTi and other accountability groups call for companies to prioritize reductions over purchasing offsets.

“We very much support the carbon offset movement and carbon pricing as a regulatory movement,” says Nicolette Bartlett, global director of climate change at CDP, the disclosure platform where companies that account for more than half of global market capitalization disclose their environmental impact. “We also fundamentally believe that what is needed is a focus on decarbonization.”

That push to de-emphasize offsets might be trouble for Walt Disney Co. and the U.S. arm of PricewaterhouseCoopers, both of which rely heavily on offsets in the face of rising emissions. Disney has bought offsets worth millions of metric tons of carbon dioxide in the past several years, and PwC U.S. more than tripled its offset purchases from 2018 to 2019. This year, PwC pledged to reach net-zero emissions worldwide by 2030.

More than 1,000 companies have worked with SBTi on climate goals, and the group says that more than 300 are now in line with the Paris Agreement’s most ambitious goal of keeping global temperatures from rising 1.5C above pre-industrial levels.

That greater ambition is on display at several companies that made five-year plans in 2015. L’Oreal SA managed to reduce emissions at its plants and distribution centers by 79% from its 2005 baseline, surpassing its goal of cutting emissions by 60%.

Siemens AG is on track to halve its operational carbon footprint in just six years. After International Business Machines Corp. hit its targets ahead of time, the company set even more aggressive goals—and has already reached one of those ahead of schedule.

For a few of the companies that made pledges in 2015, carbon reduction is becoming a part of their business. Microsoft Corp. and Ikea have since committed to becoming carbon-negative companies by removing more carbon from the air than they emit.

Some pledges are more problematic. Biotech company Novozymes A/S is on track to “avoid” 100 million metric tons of carbon dioxide by 2020. The company claims its enzymes helped customers avoid the emission of more than 380 million metric tons of CO2 in the past five years because they can replace less climate-friendly chemicals in products. Both Unilever Plc and Procter & Gamble Co.’s laundry detergents incorporate products from Novozymes. But “avoided emissions” are not recognized by SBTi, because it’s based on estimates of how much CO2 would have been produced if a company and its customers made less environmentally friendly choices.

Most companies that signed pledges with the White House back in 2015 disclose environmental impacts in their sustainability reports, or else make disclosures to CDP, which has seen a 70% rise in companies disclosing since the Paris Agreement was signed. Others provided information on their progress when asked by Bloomberg Green. But some declined to provide data or didn’t respond to requests. Staples Inc., the office-supplies retailer, promised to slash emissions in half this decade, but did not provide any information about its progress when asked. Seven other companies—Energy Optimizers, Frham Safety Products, Intren, PepsiCo Inc., Underground Construction, Valley Electric Association, and the Wittern Group—did not respond to requests for information.

Uneven disclosure remains widespread. More than a hundred of America’s largest public companies on the S&P 500 didn’t report data on their environmental impact to CDP this year, including Facebook, Twitter, Netflix, and Chevron. Some do put out sustainability reports and set goals, but companies are largely left to their own devices to define how well they’re doing on those targets. “It’s really important for us to hold companies’ feet to the fire for what they’ve promised,” says CDP’s Bartlett.

S&P 500 companies that don’t disclose data to CDP

Energy
Communications
Financials
Other

Source: Carbon Disclosure Project

Updates with additional details on corporate climate disclosures in the 20th paragraph. A previous version corrected the target date for emissions goal from Novozymes A/S in the 19th paragraph.

Methodology
Company pledges with 2020 deadlines were selected from the White House press statement. Some pledges have been adjusted by companies because of splits or acquisitions and have been included in their revised form where appropriate.

The status of quantifiable pledges was primarily judged by looking at the historical data, where available, from the baseline up to 2019 data. Contingent circumstances were considered in some cases, such as launches of renewable energy projects or the closure of factories which were planned in advance. Some pledges were omitted if they were revised by companies; not pinned to specific quantifiable metrics; or set by companies which became defunct, were acquired or had split since making the pledges.

Data were compiled using CDP reports, companies’ sustainability reports and information provided to Bloomberg Green by the companies. Some years may refer to fiscal years used by individual companies, not calendar years.

Some emissions pledges applying to Scope 2 emissions included the use of renewable-energy certificates and similar instruments. Market-based and location-based emissions were not differentiated for this analysis. Some annual emissions data were unavailable so some charts do not track every year since the baseline, but reflect the trend. Emissions charts were created only for the pledges where significant data were available.

Time’s Up on Corporate America’s 2020 Climate Goals. Here’s the Results

Goals set as part of the American Business Act on Climate Pledge 👆

Companies expecting sharp turning points in 2020 due to Covid-19

Pledges to reduce greenhouse gas emissions by 2020 👆

Disney and PwC U.S. used carbon offsets to meet their pledges

Pledges that were achieved early and went beyond

IBM revised its pledges in 2018 with more ambitious targets

S&P 500 companies that don’t disclose data to CDP