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Net-zero emissions targets: Genuine goals or Fortune 500 greenwashing?

Oct 13, 2023

2 min

Moving towards “net-zero” emissions has become a popular “target” for multinational corporations that have committed to improving their sustainability. But is it a new tagline from marketing departments or something firms are actually committed to?

About half of the U.S.-based Fortune 500 firms have declared their intent to reach net zero – the point at which the emissions from an entity equals the amount of greenhouse gasses being taken out of the atmosphere – as early as by 2030.

The University of Delaware’s Kalim Shah, an expert on energy and climate policy, has some thoughts on these targets, their feasibility and why these companies are pursuing these goals.

We should question why the language has changed in less than a decade from lowering emissions or low carbon options to “net-zero” when targets to meet lower emissions have not really been fulfilled in the first place. Part of the explanation could be to get ahead of would-be legislated pressure, that is, to dissuade legislative efforts which would imply compliance requirements, whereas now, these pledges are completely voluntary.
Net zero is more technologically feasible in some sectors/ processes and not in others. In other words, there is likely not a cost effective, technological fix for net zero in the aluminum smelting or iron or concrete making industries in the immediate future.
Lack of industry standards for measuring net zero – or perhaps more correctly, several competing methods of calculating net zero – can give some cover, for now, to firms attempting to “greenwash.” In effect, one firm's net zero may not be comparable to another's net zero.
A company’s “emissions scope” must be examined closed. Are firms referring to direct emissions related to on-site fuel combustion or fleet vehicles; Indirect emissions related to emission generation of purchased energy, such as heat and electricity; and/or Other indirect emissions related to both emissions from upstream and downstream business activities when setting targets?
We have to "read the fine print" as well, as terms that sound as ambitious but have slightly different strategies, such as “carbon neutral” and “carbon negative” targets can also complicate how we hold firms accountable.
Where net zero is less possible, emissions could be “offset” through various schemes like carbon credits of forest offsets. A carbon offset is a reduction or removal of emissions of greenhouse gases made in order to compensate for emissions made elsewhere. En vogue since the 2000s, largely because it presented a way for indebted developed countries to capture market value by preserving endangered forests when multinationals ‘"offset" operations emissions by paying said developing countries, this mechanism has become highly questionable of late for its unverifiability.

To arrange an interview, click on Dr. Shah's profile and press the contact button found there.

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Kalim Shah

Associate Professor, Energy and Environmental Policy

Expert in public policy, governance and institutional analysis for sustainable development in small peripheral economies and jurisdictions.

Public PolicyEnvironment, Social, Governance (ESG)Institutional TransformationSmall Island Developing StatesEnergy Security and Transition

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