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COMPANIES have been calculating their carbon footprints since the early 2000s and just over one-in-three of the world’s 2,000 largest public corporations have now set goals to become carbon neutral or emissions-free by mid-century or sooner.
Even Saudi Aramco – the world’s biggest oil major – has pledged to achieve “operational net-zero” carbon emissions by 2050, just days before the United Nations climate summit last year.
But with such self-set deadlines still a long way off and varying definitions of what going “net-zero” actually means for a company, there is currently no global uniform standard for how businesses disclose their carbon emissions.
Indeed, many companies have been accused of “greenwashing” – or simply making public pledges that are not matched by their actual climate-related actions.
“Greenwashing is growing and it will continue to grow as long as there are no standards that clarify who does what exactly,” said Emmanuel Faber, head of the International Sustainability Standards Board, set up last year and tasked with drafting a universal climate reporting standard for companies.
According to the NGO Carbon Market Watch, a number of multinationals only disclosed a tiny fraction of their overall emissions.
It said that Saudi Aramco resorted to the widely used trick of promising to reach net-zero only for its “operational” carbon emissions.,
That essentially means greenhouse gas emissions that are produced directly by the industrial sites it owns, but not the vast majority of “indirect” CO2 emissions produced by burning the oil it sells to clients, in their cars, power plants and furnaces.
Aramco told AFP it was reporting its emissions “in line with the GHG Protocol” and was investing in low carbon technologies for its clients.
The GHG protocol – drawn up by a US-based NGO and a group of major companies – is a way for companies to measure the greenhouse gas emissions of their factories, offices, suppliers, employees and clients.
But it is not all-encompassing and companies are not obliged to use it, making it difficult to accurately compare their overall carbon footprints.
For Thomas Koch Blank, an expert at the Rocky Mountain Institute, greenwashing has become “blatant” at some companies.
But even for well-intentioned firms, the absence of rules as strict as those used in financial accounting leaves ample room for arbitrary interpretation.
It was not until 2021 that efforts to harmonise standards really began to accelerate, said Peter Paul van de Wijs, from the Global Reporting Initiative, an Amsterdam-based body that has been developing environmental and social standards since 2000.