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What is really behind corporate promises on climate change?

Companies with tough goals have made progress. In a report last month, Science Based Targets, which was launched by environmental groups and hundreds of companies united by the United Nations, said the 338 large companies around the world for which it had emissions data sufficient had collectively reduced their emissions by 25%. between 2015 and 2019.

Large companies in the same industry often have very different backgrounds.

For example, Walmart discloses its emission reduction targets and progress on the Carbon Disclosure Project, including a target for its supplier emissions, and its plan has been approved by Science Based Targets. But Costco doesn’t expect to commit to reducing emissions until the end of next year. Costco executives declined to comment.

Netflix is ​​often compared to tech giants like Google and Microsoft. But Netflix has yet to set a target for reducing emissions from its offices, production operations and the computer servers it uses. “Climate action is important and we will announce our plans in the spring, which will include targets based on climate science,” the company said in a statement.

Reducing emissions is difficult. Businesses need to reliably measure the amount of carbon dioxide and other greenhouse gases for which they are responsible. Next, businesses need to find cleaner sources of energy without hurting their operations. When they can’t find cleaner substitutes, companies often pay others to reduce emissions or remove carbon from the atmosphere.

The task becomes even more difficult when companies begin the process of reducing so-called Scope 3 emissions – pollution caused by suppliers and customers. In oil companies, for example, Scope 3 would include emissions from gasoline-powered cars.

BlackRock, with $ 8.7 trillion in assets under management, including stakes in many companies, clearly faces a daunting task. The company doesn’t directly own most of the stocks or bonds it buys – it manages them for pension funds, other companies, and individual investors – which limits the degree of climate activism it can pursue. Additionally, most of its investment products track indexes like the S&P 500, which inevitably ends up managing stocks of fossil fuel companies.

Many Wall Street companies have pledged to achieve net zero emissions from their loans and other financial activities, but have not clarified whether this target applies to stocks and bonds they manage for their clients. BlackRock’s decision to include all the assets it manages could put pressure on other financial giants to make similar commitments, but it could put the fossil fuel industries and their political supporters at the forefront of Congress.

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