Are Multinationals Doing Enough for the Climate?

Many of the biggest polluters and greenhouse gas emitters on the planet are transnational companies. A new report from Thomson-Reuters looks at the world's 500 largest companies and examines if they are making the emissions cuts necessary to meet science-based climate goals.

These companies are responsible for a massive 10 percent of global emissions – about the same as the entire European Union, Thomson-Reuters found. And worryingly, their emissions actually increased by 1 percent from 2010 to 2015 – a period in which we needed a 6 percent drop. In contrast, many countries, including the United States, did see a drop during that time, despite economic growth. It is this kind of decoupling of revenue growth and emissions we need to see in the corporate world as well.

“Many of the largest emitters have yet to show this kind of decoupling,” said John Moorhead, head of the climate change practice at BSD Consulting and one of the authors of the report, in a press statement. “Although the gap with a 2-degree pathway for the Global 500 has decreased to 6.6 percent of total emissions, the gap still remains significant."

Many of the worst offenders are – surprise, surprise -- energy companies, particularly those in developing countries where energy usage is growing fast. The largest increase of any company in the world was Coal India, which is working to build numerous new power plants in the world's second largest country. Here in the United States, the largest emitters were Duke Energy, which operates several coal-fired power plants, followed closely by America Electric Power Co. and, not surprisingly, the climate-denier's best friend, gas giant Exxon-Mobil.

On the flip side, European utility companies – which reap the benefits of the continent's massive wind and solar investments -- were among the leaders in reducing emissions. There were two American companies among the top three leaders – Valero Energy and Dominion Resources. Valero's drop is likely due to low oil prices and not any corporate leadership. But Dominion has shifted away from coal and slowly into renewables. Nonetheless, being slightly less bad does not deserve much accolades.

The conclusion? We have a lot of work to do. Companies must be aware of their impacts globally, and work to reduce emissions in-line with scientific standards, such as those set by the Intergovernmental Panel on Climate Change (IPCC). On that note, the authors see positive momentum in light of last year's Paris Agreement.

“Following COP21 last year, sustainable business growth has become a top priority and focal point for many organizations,” said Tim Nixon, a co-author for the report with Thomson Reuters, in a press statement. “Organizations recognize sustainable business growth is central to mitigating risk and driving top and bottom line performance.”

Whether this turns into real change is yet to be seen. Large corporations have a key role, due to their size and scope, in creating a solution to climate change by reducing emissions globally. Let's hope this change comes sooner rather than later.

Image credit: Mohri via Flickr