Residual carbon emissions in companies’ climate pledges: who has to reduce and who gets to remove?

Corporate carbon neutrality pledges have been criticized for their lack of integrity, especially when they are primarily based on the simple purchase of carbon offsets without making any significant emission reductions. Neutrality pledges that are consistent with the goal of the ISO corporate net zero guidelines should be based on the reduction of all but the so-called unavoidable or residual emissions. The residual emissions should be neutralized not through reduction offsets but by actually removing the equivalent amount of emissions from the atmosphere. In this paper, I analyze whether climate pledges of 115 large companies, which cover all eleven Global Industry Classification Standards’ sectors, follow the aforementioned net zero definition. The assessed criteria are (i) the type of pledge made, (ii) the definition of residual emissions employed and (iii) whether the company commits to neutralize its emissions exclusively with removals. Secondly, the assessment involves evaluating the companies’ commitment to their net zero pledges by examining the residual emission level provided and determining if their climate goal extends to absolute scope 3 emissions. From the companies that had a net zero target (69) only 22% aimed to reduce emissions to a residual level and compensate with removals. The residual emission levels in the target year is specified by 29 companies and ranges between 0 and 80% (mean = 19.3%, median = 10%, n = 29). More than half of the residual emissions that exceed the median of 10% are claimed by sectors that are not classified as hard-to-abate such as information technology or communication companies.Corporate net-zero goals appear more ambitious than the reduction and compensation commitments that companies are makingResidual emission levels that determine the reduction obligations under a net-zero pledge should not be determined by corporates or technical experts aloneInvolvement of governments and civil society actors in participatory processes at national and international level is needed to determine residual emissions‘Fair contributions’ and thus residual emissions should be informed by companies’ impact on fulfilling the needs of the most vulnerable