Sep 22, 2020 - Energy & Environment

Making sense of new corporate sustainability pledges

a hand nearly touching a hot pipe
Illustration: Sarah Grillo/Axios

Giant corporations that make sustainability pledges have long faced justified skepticism over greenwashing, but several recent moves look somewhat more "green" and less "washy."

Driving the news: We're in the midst of a burst of new pledges by big multinationals, some of them around the annual "climate week" gathering of policymakers, companies and advocates.

Catch up fast: The many moves yesterday and in recent days and weeks include...

  • Walmart's pledge to zero out its operational emissions by 2040.
  • Banking giant Morgan Stanley's vow to have net-zero "financed emissions" by 2050.
  • Google's goal that within a decade its data centers will run around the clock on zero-carbon power.
  • Amazon's start last week in spending money from its big climate tech VC fund.

Why it matters: Climate pledges are getting less airy and, if carried out, would see companies accomplishing more tangible actions.

  • For instance, BP's long-term plan to diversify away from its dominant fossil fuel business will steeply cut its oil production over the next 10 years.
  • On the energy user side, consider that Walmart is vowing to reach its goal without buying offsets.
  • And this Vox piece looks deeply at Microsoft's recent moves.

What they're saying: "Lots of people were right to criticize early efforts as more marketing than material, but I think we have reached an inflection point and corporate climate commitments will get more ambitious and robust," says Joseph Majkut, director of climate policy at the think tank Niskanen Center.

He sees several forces at play, including...

  • Corporations understanding that "young, dynamic, and intelligent job candidates want to work for a company that is leading on climate."
  • The "economics and risk management" side of things. "For a lot of companies, clean energy is the cheaper and more resilient option," he says, while others are "getting ready for a transition they expect will only accelerate."

The intrigue: Corporate ethics expert Alison Taylor said companies are being pushed to address ongoing "contradictions" in their climate plans, such as how banks have renewable energy funds and oil industry clients.

  • "I think there is a ton of pressure to join these dots and address these contradictions, both because shareholder activism is increasingly focused on political spending, and also because employee activists often have enough passion and access to highlight these gaps," adds Taylor, who's with NYU's Stern School of Business.
  • "Both these trends push for more ambition and more disclosure on reputational grounds," she says.

Yes, but: "I don't think these issues are being addressed adequately, to date," Taylor tells me.

  • But she also sees some interesting developments occurring amid escalating pressure.
  • Taylor points to how several European oil giants have pulled out of some lobbying groups over their climate stances, and notes that "pressure on Amazon with regard to oil and gas clients is not going away."
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