Deceitful financial strategies and inappropriate disclosures around corporate climate action initiatives spur demands for regulatory oversight
News Article: Major Companies Fall Short in Corporate Climate Leadership, Report Finds
The latest Corporate Climate Responsibility Monitor (CCRM) 2025 has revealed that major global brands in the tech, fashion, automotive, and agrifood sectors are failing to demonstrate credible and sufficient corporate climate leadership. The report, which assesses companies based on their emission tracking, target setting, adherence to sectoral transition targets, and efforts to tackle ongoing emissions and scale up carbon emission removals, finds that progress is generally inadequate and systemic challenges persist.
In the tech sector, companies such as Amazon, Apple, Google, Meta, and Microsoft are criticised for outdated and insufficient climate strategies that do not align with 1.5°C pathways. The fashion sector, represented by brands like adidas, H&M, Inditex, lululemon, and Shein, is also under scrutiny for undermining climate pledges through poor emissions accounting and vague commitments.
The automotive sector, with representatives like Ford, GM, Stellantis, Toyota, and Volkswagen, faces bottlenecks in deep sector-wide decarbonization. Climate strategies in the agrifood sector, including Danone, JBS, Mars, Nestlé, and PepsiCo, are evaluated critically, with room for improvement in reducing emissions and aligning with scientific targets.
The report highlights several issues, including misleading emissions accounting, the overuse of false climate solutions, and insufficient disclosure, which make it difficult to clearly assess corporate progress and undermine the credibility of many climate pledges.
Benja Faecks, an expert on global carbon markets at Carbon Market Watch, recommends a strong regulatory framework to ensure that the private sector takes real climate action without engaging in greenwashing. Faecks also suggests that target-setting frameworks should require companies to set transition-specific targets, such as food firms shifting to plant-based food or automakers producing more electric vehicles.
The goal posts of what constitutes best practice in climate action have shifted with growing scientific evidence that underpins the climate crisis, and the CCRM is calling for regulators to step in to bring greater accountability to climate targets. Faecks further recommends that standard setters should oblige agrifood companies to set separate targets for carbon removal and reduction to bring greater transparency to the sector, and for companies to disclose whether they use carbon dioxide removals or carbon credits.
While some good practices exist, the report concludes that major companies in these sectors must significantly improve transparency, ambition, and implementation to meet the scale of emissions reduction required for the Paris Agreement. No company evaluated achieved top marks, and progress is generally inadequate.
Regulators are called for to create an environment where corporate climate action is a business necessity rather than a voluntary side job. All top-performing companies in this year's report were headquartered in the European Union, where large companies are required to disclose their environmental and social impacts in alignment with the Corporate Sustainability Reporting Directive (CSRD).
The investigation revealed that the decarbonisation pledges of 20 large firms in the technology, fashion, automotive, and agrifood sectors are falling short of 2030 global climate goals. Notable exceptions include H&M's efforts to increase the use of renewable electricity in its supply chain and Mars' attempts to weed deforestation out of its supply chain. Danone is the only firm that has set a 2030 methane emissions reduction target for its milk production and plans to increase its share of plant-based protein, but has not set a target for plant-based protein. Only Danone has a credible and ambitious food loss and waste target.
The report also identifies some of the worst practices, with no companies' climate programmes rated to have a high or even reasonable level of integrity. Chinese fast fashion brand Shein and Japanese carmaker Toyota were deemed to have "very low" integrity. Climate commitments in the automotive sector were rated as critically insufficient due to the absence of specific commitments to reduce emissions and the lack of progress to phase out internal combustion engines.
Shein's 2030 targets allow the ultra fast fashion brand to more than double its emissions compared to 2021, and the company's 2030 targets are not Paris-aligned. Tech firms are relying on market-based accounting for Scope 2 emission calculations, which allows them to claim a reduction in emissions from activities such as buying renewable energy certificates (RECs), even when their actual, location-based emissions may not have dropped at all. All of the tech firms in the study - Amazon, Apple, Google, Meta, and Microsoft use the market-based accounting approach.
In summary, while some good practices exist and awareness is increasing, the 2025 Corporate Climate Responsibility Monitor concludes that major companies in these sectors must significantly improve transparency, ambition, and implementation to meet the scale of emissions reduction required for the Paris Agreement. The report calls for more stringent regulation to make credible corporate climate action a business necessity.
- The Corporate Climate Responsibility Monitor (CCRM) 2025 revealed that major tech companies, such as Amazon, Apple, Google, Meta, and Microsoft, are criticized for insufficient climate strategies that do not align with 1.5°C pathways.
- In the fashion sector, brands like adidas, H&M, Inditex, lululemon, and Shein are under scrutiny for undermining climate pledges through poor emissions accounting and vague commitments.
- The report also highlights the need for transparency, ambition, and implementation improvements in the agrifood sector, including Danone, JBS, Mars, Nestlé, and PepsiCo, to meet the scale of emissions reduction required for the Paris Agreement.
- Benja Faecks, an expert on global carbon markets, recommends a strong regulatory framework to ensure that private sector companies take real climate action without engaging in greenwashing, and obliges agrifood companies to set separate targets for carbon removal and reduction.
- The investigation found that the decarbonization pledges of 20 large firms in the technology, fashion, automotive, and agrifood sectors are falling short of 2030 global climate goals, and no companies evaluated achieved top marks, emphasizing the need for more stringent regulation to make credible corporate climate action a business necessity.
