Behind the Headlines on Net-Zero and Carbon Reduction Pledges

To what degree is optimism warranted?

Glass office buildings surrounded closely by bright green leaves
Topic
Social Impact
Author
Katie Gilbert
Published

The International Energy Agency made headlines and sparked hope last week with an optimistic statement via Twitter: “New IEA analysis shows that fully achieving all net zero pledges to date and the Global Methane Pledge by those who signed it would limit global warming to 1.8C.”

Shivaram Rajgopal, professor of accounting and auditing at Columbia Business School, is skeptical that the collective commitments made so far really add up to something quite that significant. Practically speaking, he’s concerned about how long-term commitments will be upheld by future leaders in the countries around the world that are eagerly making them today—especially in the absence of an oversight body designed to track the incremental progress toward climate pledges and hold governments accountable.

Rajgopal’s skepticism may have been partially primed by his current research, an ongoing project in which he is analyzing the credibility of the emissions reductions pledges of US oil and gas companies. Overall, preliminary data indicates that these oil and gas majors’ commitments lack standardization, specifics regarding implementation, and, perhaps most importantly, dedicated funding.

Of the 41 US oil and gas firms that Rajgopal is tracking, 20 have made net-zero commitments (pledging to ensure that carbon emissions equal no more than carbon removed from the atmosphere) and 21 have promised to simply reduce emissions.

Of those who have made these commitments, three have not yet published a sustainability report. Only about half of them target a specific year in their pledges, and those years vary from 2025 to 2050. And a mere seven of the oil and gas firms on Rajgopal’s list have earmarked any capital for low-carbon or decarbonization initiatives.

“Headlines about net-zero commitments sound great,” Rajgopal says. “But once you unpack the headlines, you get a whole can of worms.”

How do these early findings relate to the government climate pledges coming out of COP26? Rajgopal says that in the absence of the type of oversight body he wishes could be formed, it’ll be incumbent on nonprofits and other watchdogs to unpack the pledges and examine the “can of worms” inside commitments one by one, as he has begun to do with the climate promises of the US oil and gas industry.

And when governments haven’t promised transparency around incremental progress toward these goals, it will be up to the public to demand it.

More Features

A hand holding a green marker, coloring in gray smoke that's pouring out of a smokestack
Social Impact

Are Governments at COP26 Guilty of “Greenwashing?”

Lack of full transparency by governments and other entities offers an opportunity for greenwashing, says management professor Vanessa Burbano

A wild rages in Tasmania, one of dozens of major fires to break out around the world in the last year
Social Impact

The Climate Crisis is Real…and Escalating. CBS Experts Weigh in on What We – and Business – Can Do About It

As the world continues to confront the threat of climate change, business must play a leading role in how society will develop solutions to this challenge.

PLACEHOLDER DO NOT POST
Social Impact, Leadership, Entrepreneurship & Innovation

The Best of Bizcast 2020

A look back at some of our most popular podcasts from 2020.

Person with a zipper mouth and I voted sticker
Social Impact, The Workplace, Leadership

Do You Tell People Who You’re Voting For?

Keeping your vote a secret from family and close friends could result in feeling regretful and inauthentic.

Rise to the challenge.

The COVID-19 pandemic has changed the world of business, while bringing historical inequities and injustice into sharp relief.

Subscribe to Leading Through Change to receive the latest insights from Columbia Business School to help you navigate this unprecedented time.