The country's largest companies are increasingly acknowledging the risks they face from climate change and water and resource scarcity, and more are promising to cut greenhouse gas emissions. But relatively few are making time-bound commitments based on science to tackle climate-related challenges, according to a new sector-by-sector analysis.
The Boston-based sustainability advocacy group Ceres released a detailed analysis Tuesday of the performance of more than 600 of the largest publicly traded companies in the U.S. across a spectrum of industries, from agriculture to finance.
It found that 64 percent of the companies have pledged to reduce greenhouse gas emissions, but only 36 percent have set deadlines for action. Only about 9 percent have set science-based targets in line with the Paris climate agreement goal of keeping global warming under 2 degrees Celsius, according to Ceres.
About one-third have made commitments to transition to renewable energy.
"What we need to see across sectors is a significant increase in the level of ambition," said Kristen Lang, who leads Ceres' assessment of the companies.
In some industries—particularly those most directly affected by climate change—companies are taking more concrete actions.
Food Companies See Risks in the Supply Chain
In the food and beverage industry, for example, 86 percent of the companies studied have set specific timeframes to reduce greenhouse gas emissions. General Mills, the report notes, set a science-based goal to reduce greenhouse gas emissions 28 percent by 2025 across its value chain, "from farm to landfill." The cereal maker also has a goal to bring its emissions in line with the scientific consensus, but with a deadline well in the future: 2050.
Several others in the industry, including PepsiCo, which has a growing electric vehicle fleet, are making commitments to reduce emissions from transportation. And 95 percent of the food and beverage companies studied include climate-related risk in annual disclosures, compared to 50 percent of companies more broadly.
"It's those sectors, such as food and beverage, that are starting to see the very real impact of climate on their sourcing and within their supply chain," Lang said. "Those sectors that are being more significantly impacted by climate risk today are those that are getting it a little faster."
Technology Embraces Renewable Energy
In other sectors, customer demand and concerns about corporate reputation are helping drive changes. The report highlights Apple, which recently announced that it had reached 100 percent renewable energy worldwide and that 23 of its suppliers had committed to do the same.
Overall, the industries with the largest percentage of companies setting quantitative, time-bound targets for reducing greenhouse gas emissions were the food and beverage sector at 86 percent, followed by transportation at 50 percent and technology hardware at 48 percent. The numbers drop off after that, including 40 percent of apparel companies, 35 percent in finance, 25 percent of utilities and 13 percent of oil and gas companies.
While half of companies in transportation, such as carmakers, committed to increase renewable energy use, only 9 percent set targets with deadlines. In the technology hardware sector, 26 percent of companies studied set quantitative, time-bound targets for their use of renewable energy.
More Executives Held Accountable for Sustainability
The Ceres analysis follows an earlier one, released in February, that found more companies are factoring the impact of climate change into their businesses but aren't taking concrete steps to achieve their goals. (Ceres measures the companies against 20 benchmarks it set in its "Roadmap for Sustainability.") For example, it found that only 69 percent of companies have pressed their suppliers to improve environmental and social impacts.
That report found some significant improvement in certain areas.
The last time Ceres conducted its review, in 2014, only 42 percent of companies held senior-level management accountable for sustainability performance; in 2017, that number was 65 percent.
"We're seeing more companies recognize the financial and business impacts of issues like climate change and human rights," Lang said. "But what the data shows us is that we need companies of all sizes and across all sectors to transition from general commitments to concrete action."