Companies need to have climate plans—not just pledges

We’re at a crucial moment in the fight against climate change. In the wake of the UN’s climate summit in Glasgow, there’s now more global demand for action than ever—and companies are on the front lines. Consumers want to buy from sustainable brands, employees want to work for climate-conscious employers, and governments and investors are demanding companies report carbon in the same way they report their financials. The pressure is on from all sides.

So it’s no surprise that we see new corporate climate announcements on a daily basis. Yet, it still can be difficult to cut through the jargon and tell the difference between empty pledges and serious plans that will turn into meaningful climate action.

In my conversations with climate-progressive companies like Airbnb, DoorDash, Sweetgreen, and Everlane, I see four hallmarks that separate real action from empty talk:

Look beyond a company’s walls

It starts with what you measure. Many companies still don’t know their full carbon footprint. Carbon accounting rules divide emissions into “scopes”—categories of carbon that a company is responsible for. Traditionally, companies looked narrowly at Scope 1 and 2 emissions—from the buildings and facilities they control directly. But for most companies, Scope 3 emissions—from suppliers, customers, and partners—are the most important piece of the puzzle, often accounting for 80% or more of the total. But most companies are blind to this impact.

In a positive example of how counting Scope 3 can lead to real climate impact, the restaurant chain Sweetgreen counts methane from the dairy farms that supply cheese for their salads. And because they’re measuring each supplier individually, they’re able to buy ingredients in a way that cleans up their whole value chain.

Companies often announce seemingly aggressive climate plans while leaving out Scope 3 altogether. This can give them impressive PR but with minimal impact on what actually matters: keeping fossil fuels in the ground and carbon out of the atmosphere. If they’re not tracking and reporting their full emissions, they’re not serious about the realities of climate change yet.

Net zero

Semantics matter. You’ve likely seen companies claim “carbon neutrality,” which to many can read the same as “net zero emissions.” But they’re not the same. Carbon neutrality just means a company is buying carbon offsets for a subset of emissions (often only for Scopes 1 and 2!), or paying someone else not to pollute. While these arrangements are a good start, they don’t go far enough to get us to true zero carbon.

Net zero plans factor into a company’s entire footprint, including Scope 3, and focus on radically reducing emissions by switching to clean energy, cutting down business travel, and greening supply chains. Then after getting as close to zero as possible, net zero companies fund carbon removal for any emissions that remain. This is what’s going to keep us on the right side of the red temperature line: real reductions and removal. When you see carbon neutrality in a climate plan, look deeper to see if there’s a clear pathway to net zero.

Follow the science

Take note of the carbon target a company cites as their end goal. The gold standard is the Science Based Targets initiative (SBTi), which works backward from our remaining global carbon budget to set “fair share” science-based targets for individual industries and companies.

While the exact reductions required vary based on the size, sector, and growth of each company, a SBT means they plan to reduce emissions—including Scope 3!— in line with what scientists say is necessary to keep warming below 1.5 degrees Celsius above pre-industrial levels. That means, if every company set and hit a SBT, the world would be on track to avert the worst of climate change.

Corporate climate plans with a SBT are the gold standard. If a plan doesn’t mention one (or at least a concrete plan to set one), that’s an invitation to ask management why.

Transparency

If we’re going to beat climate change, we need companies to be open about how they’re tracking toward their goals. It’s one thing to set an ambitious target, and quite another to take the right actions to get there. And it’s one thing to get stuck, and another to invite in help.

Good programs publish their carbon graph and show its trajectory over time. Microsoft’s sustainability reports are an excellent example. If a company issued a climate plan five years ago but hasn’t shared an update since, that’s a red flag. Companies can’t wait until 2029 to start work on their 2030 goal. Reporting should be annual, at minimum.

The second-best time really is now

The climate problem is urgent: The latest science says we have just 97 more months to reduce global emissions by half if we want to avoid the worst of climate change—and it’s on all of us to get there. As business leaders, this means calling out suppliers and partners with lackluster carbon commitments, making purchasing decisions that align with net zero, and educating one another so that we can collectively make a difference. While COP might be over, we can’t afford for climate momentum to slow down. We’re too far behind, and it’s too important.

Good plans are only the first step. But they’re a necessary first step, and it’s not too late for more companies to take it.


Taylor Francis is a cofounder of Watershed.