I’m preaching to the choir, but companies are investing a tremendous bit of time, effort and cost into gather emissions data to report and track it. Sometimes – such as in the case of new California laws and certainty the EU CSRD – this is mandatory. But what happens if you miss the emissions reduction targets/goals that your company establishes?
Well… maybe not much according to a new study Limited accountability and awareness of corporate emissions target outcomes published in Nature.
“Overall, our paper finds limited accountability over emissions reduction targets that ended in 2020 for firms. Target outcomes are not readily available, with a third of the targets disappearing without disclosing target outcomes. There is a lack of transparency and media coverage about target outcomes. Failing targets is not associated with negative consequences, while announcing targets provides firms with benefits.”
But not so fast. The paper has shortcomings as the authors disclose:
“First, we acknowledge that firms self-select to have 2020 targets… our main analysis only contains firms with 2020 targets, and we focus on comparing failed and disappeared firms against those that achieved their targets. Second, we rely on CDP data, which, despite being the most comprehensive data source for 2020 emissions targets, are based on the self-reported target and progress of a firm… Third, we acknowledge that the 2020 targets may be impacted by COVID-19. This raises concern about whether external shocks in 2030 and 2050 can serve as a reasonable excuse for firms failing or going dark on their targets, particularly as climate change is expected to increase the frequency of natural disasters.”
From my point of view, I don’t think looking at 2020 results is a reliable apples-to-apples comparison (or even reasonable proxy) for 2025. 2020 is ancient times in the context of modern sustainability/ESG – predating international regulatory mandates and widespread adoption of climate metrics in executive compensation plans.
It’s just better to be upfront and honest about missed emissions reduction targets/goals.
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