The Corporate Climate Responsibility Monitor, which was written by NewClimate Institute in collaboration with Carbon Market Watch, evaluated the ‘transparency and integrity’ of headline climate commitments for 25 global companies. The think tank examined corporate headline climate pledges and concluded that, in the majority of cases, these cannot be taken at face value.
“We set out to uncover as many replicable good practices as possible, but we were frankly surprised and disappointed at the overall integrity of the companies’ claims” said Thomas Day of NewClimate Institute, lead author of the research.
In the food sector, the report put Unilever and Nestlé under the microscope. Its findings were far from flattering.
‘Targets will get us nowhere’
Both Nestlé and Unilever have committed to reducing their respective carbon footprints.
Unilever has made three headline climate pledges: to achieve zero emissions from Unilever’s operations (scope 1 & 2) by 2030; to halve the full value chain emissions (scope 3) of products per consumer use by 2030; and to reach net zero across its value chain by 2039. In addition, the company has the short-term emissions reduction target of reducing in absolute terms operational emissions by 70% by 2025 against a 2015 baseline.
Nestlé, meanwhile, has said that it will halve its greenhouse gas emissions by 2030 and reach net zero by 2050. This aim covers scopes 1, 2 and 3 of the value chain and the Swiss food giant has earmarked an investment of CHF3.2 billion over the next five years to accelerate its path towards net zero emissions.
Sounds impressive? NewClimate Institute and Carbon Market Watch advise caution. The group’s Corporate Climate Responsibility Monitor – which aims to hold business to account for its climate claims – concluded targets set by both companies ‘have very low integrity’.
“Setting vague targets will get us nowhere without real action and can be worse than doing nothing if it misleads the public. Countries have shown that we need a fresh start when adopting the Paris Agreement, and companies need to reflect this in their own actions,” insisted Gilles Dufrasne from Carbon Market Watch.
So, if the devil is in the detail, what problems does the Corporate Climate Responsibility Monitor identify in Nestlé and Unilever’s approach to greenhouse gas reduction?
Unilever and Nestlé accused of exaggerating impact
To start with, the report implies Nestlé could be fudging the numbers in its climate roadmap. “Nestlé’s interim emission reduction target of 50% by 2030 may really mean only an 18% reduction compared to its entire 2018 emissions footprint. Nestlé’s SBTi-certified targets include emission reduction targets for 20% by 2025 and 50% by 2030, compared to a 2018 base year. This is not clearly consistent with the information that Nestlé presents in its own net-zero roadmap publication: close analysis of Nestlé’s planned trajectory and targets for specific emission sources lead us to interpret that Nestlé’s 50% by 2030 target may be compared to a business-as-usual scenario, and covers only selected emission sources.”
In other words, if Nestlé’s reduction target is compared to where emissions would be with no action taken – business-as-usual – instead of where emissions were in 2018, the report authors argue that the company is overstating said reduction. Nestlé outright refutes this, insisting that climate targets are measured against a 2018 baseline of 92 million tonnes of CO2e, meaning it intends to deliver in ‘absolute terms’ a reduction of 46 million tonnes of CO2e by 2030.
The Monitor is critical that both Nestlé and Unilever fail to specify defined targets for what reductions will be achieved within their own operations or their up- and downstream value chains. “Nestlé’s target for net-zero emissions by 2050 remains ambiguous due to incomplete scope coverage and no defined target for own emission reductions,” the climate groups critique. “Unilever set a net-zero target by 2039 that covers all emission scopes, but does not have specific emission reduction targets covering its upstream and downstream emissions.”
Again, Nestlé explicitly rejects this interpretation, insisting targets cover ‘all 3 scopes of our activities’ and stressing that the company ‘clearly and publicly states which emissions fall within the scope’, going beyond the recommendations in the recently released Science Based Targets Initiative (SBTi) Net-Zero Standard.
Looking at Unilever’s value chain, the report contends the inclusion of use-phase emissions (for example, the electricity used by washing machines of consumers that buy Unilever detergents) is one way the company’s reduction achievements could be overstated. “Although driving down emissions in the indirect use-phase is commendable… their inclusion in the intensity target could lead observers to wrongly believe that the company is achieving reductions in the company’s other emission sources. Given that 65% of the reported carbon footprint of Unilever’s products is made up of emissions in the use phase, Unilever could claim to have achieved major improvements in its emissions intensity due to the actions taken by other actors to decarbonise the electricity grid and improve the energy efficiency of appliances.”
Offsetting is another point of contention. Carbon offsets remain controversial, with detractors suggesting that they fail to address the underlying issue of GHG emissions and can be used for greenwashing. “The practice of offsetting has been afflicted by controversy and contention due to significant uncertainties in the real impact of offset credit use as well as the suitability of carbon dioxide removals for neutralising emissions,” explained NewClimate Institute’s Day.
According to the paper, Unilever’s position on offsetting is ‘unclear’ and ‘inconsistent’. “While Unilever distances itself from the practice of offsetting, it also proactively supports its own brands to make use of offsets towards their carbon neutral and climate positive claims, and Unilever plans to use offsets to achieve its 2039 net-zero target,” it stated.
Likewise, the authors take issue with Nestlé’s position on offsetting. “At the holding company level, Nestlé claims to rule out offsetting, but this is inconsistent with the company’s plan to encourage its individual consumer-facing brands to offset and claim carbon neutrality. The near-term nature of these plans leads to a major role for offsetting in many cases, usually with carbon dioxide removals from nature-based solutions.”
Misleading or overblown claims can have very real consequences, Day and Dufrasne stressed. “Ambitious-sounding headline claims all too often lack real substance, which can mislead both consumers and the regulators that are core to guiding their strategic direction. Even companies that are doing relatively well exaggerate their actions,” Day warned.
Carbon Market Watch’s Dufrasne believes increased regulation will be required to combat the tendency for companies to greenwash their climate efforts. “We’re fooled into believing that these companies are taking sufficient action, when the reality is far from it. Without more regulation, this will continue. We need governments and regulatory bodies to step up and put an end to this greenwashing trend.”
Food giants fire back
Both Unilever and Nestlé were quick to defend their records on climate action while also stressing their commitment to transparency and external scrutiny.
“While we share different perspectives on some elements of this report, we welcome external analysis of our progress and have begun a productive dialogue with the NewClimate Institute to see how we can meaningfully evolve our approach,” a Unilever spokesperson told FoodNavigator. The company pointed to the fact that its two 2030 targets are both approved by the SBTi and stressed that its ‘targets and approach’ were detailed in its Climate Transition Action Plan, which secured the backing of 99.59% of the shareholders at last year’s AGM.
The spokesperson also noted that Unilever has been awarded an ‘A’ rating for its climate performance by CDP, an international non-profit that helps companies and cities disclose their environmental impact. “We believe that transparent reporting of our progress is critical, which is why we have responded annually to the CDP annual benchmarking disclosure since it was founded in 2010. For ten consecutive years, Unilever has been awarded an A grade from CDP for Climate Performance. We make our disclosure available on our website and include extensive information within our Annual Report and Accounts.”
In a slightly sharper retort, Benjamin Ware, Global Head of Climate Delivery & Sustainable Sourcing at Nestlé, said NewClimate Institute’s work ‘lacks understanding of our approach’ and ‘contains significant inaccuracies’.
“Our greenhouse gas emissions have already peaked and continue to decline. By 2030, our plan is an absolute reduction of emissions by 50% even as our company grows,” he said, highlighting that Nestlé’s net zero Climate Roadmap is SBTi validated. “The work that went into it is rigorous and extensive. We have engaged with the NewClimate Institute to explain the data and methodology behind our strategy. Our Roadmap is a starting point, and we remain focused on delivering against our public ambitions now and into the future.”