Corporate environmentalism: All talk, no action
Corporate America’s push to become more environmentally friendly is all talk but not much action, according to a recent analysis examining net-zero emission targets.
The number of companies pledging to cut greenhouse gas emissions to zero has grown by more than 40% to 1,003 since June 2022, according to Net Zero Tracker.
The problem? Only 4% of these companies meet the UN’s “race to zero” criteria for reaching the goal.
In other words, companies know that going green is good for business—they just lack a concrete plan for making it happen.
Net Zero Tracker refers to this as a “credibility gap” when companies fail to translate climate commitments into action.
“Many companies need to urgently refine their pledges and implementation strategies in line with the UN Expert Group’s recent markers of credibility and other Paris-aligned standards,” said Dr. Takeshi Kuramochi of the NewClimate Institute.
The “Paris-aligned standards” are a nod to the Paris Agreement, an international treaty on climate change that also targets net-zero emissions as a primary goal.
Peter Chalkley, a director at the Energy and Climate Intelligence Unit, hailed the U.S. Inflation Reduction Act as a game-changer in the push for net zero.
The piece of legislation is “driving the construction of new EV plants and battery factories” and forcing other countries to examine their own efforts, Chalkley said in Net Zero Tracker’s press release.
Bidenomics makes an aggressive push for net zero
President Biden has made tackling climate change a cornerstone of his administration by releasing America’s “first-ever” blueprint to decarbonize the nation.
The blueprint seeks to reduce all carbon emissions from the transportation sector by 2050 and develop a clean electrical grid by 2035.
How much will Bidenomics cost American taxpayers? So far, more than $2 trillion.
Not all spending is climate-specific, but there are clearly climate considerations in the CHIPS and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act.
Americans support going green, but it’s complicated
Roughly three-quarters of Americans support their country’s participation in global climate change initiatives, according to Pew Research.
Some economists attribute this perception to the inflation hangover from 2021-2022 when the consumer price index hit 40-year highs.
“There’s this disjunction between reality and perception that’s as large as I’ve ever seen in my career,” Justin Wolfers, an economics professor at the University of Michigan, told CNN.
While inflation has improved significantly, it’s still well above the Fed’s target for a healthy economy. For that reason, higher interest rates are potentially here to stay.
Those elevated rates may undermine President Biden’s push for climate action—at least in the short term.
While a growing number of climate-conscious consumers are buying electric cars to reduce their carbon footprint, demand for EVs isn’t as strong as the industry hoped.
Many automakers are slashing EV prices, while others have scrapped multi-billion-dollar projects to focus on traditional gas guzzlers.