Firms Say They Care Concerning the Local weather. Their Actions Fall Brief.
Companies that have strict goals have made some progress. In a report last month, Science Based Targets, launched by environmental groups and hundreds of companies brought together by the United Nations, said the 338 large companies around the world for which there are sufficient emissions data were checking their emissions reduced by a total of 25 percent between 2015 and 2019.
Often times, large companies in the same industry have very different records.
For example, Walmart announces its emissions reductions targets and progress it has made on the Carbon Disclosure Project, including a target for emissions from its suppliers, and its plan has been reviewed by Science Based Targets. However, Costco does not expect any commitments to reduce emissions by the end of next year. Costco executives declined to comment.
Netflix is often compared to tech giants like Google and Microsoft. However, Netflix has not yet set itself a goal to reduce the emissions caused by its offices, manufacturing activities, and the computer servers it uses. “Climate protection is important and we will announce our plans in the spring, which include climate science goals,” the company said in a statement.
Reducing emissions is difficult. Companies have to reliably measure how much carbon dioxide and other greenhouse gases they are responsible for. Then companies need to find cleaner sources of energy without affecting their operations. Where they can’t find cleaner substitutes, companies often pay others to cut emissions or remove carbon from the atmosphere.
The task becomes even more difficult when companies start reducing what are known as Scope 3 emissions – pollution from suppliers and customers. For oil companies, for example, Scope 3 would include emissions from cars that use gasoline.
Clearly, BlackRock, with $ 8.7 trillion in assets under management including holdings in many companies, is facing a daunting task. The company doesn’t directly own most of the stocks or bonds it has bought – it manages them for pension funds, other companies, and individual investors – and limits as much climate activism as it can engage in. In addition, most of its investment products track indices such as the S&P 500, so inevitably stocks of fossil fuel companies are managed.
Many Wall Street companies have committed to zero net output in their credit and other financial activities, but have not made it clear whether that goal applies to the stocks and bonds they manage for customers. BlackRock’s decision to include all of the assets it manages could put pressure on other financial giants to make similar commitments, but it could upset the fossil fuel industry and its political supporters in Congress.