2021's Biggest Corporate Climate Commitments (So Far)
Are Corporations the New Climate Warriors?
Happy post-Earth Day! It’s been a busy couple of months since my last send, and I’m happy you’re still here :)
What I’ve been up to:
Over the last two months, I created and led our first-ever Climate Change for VCs course with Terra.do bringing together a cohort of impressive investors looking to put money to work fighting climate. Our next cohort starts June 9.
I’ve also continued to run our Climate Headlines Clubhouse room. Join us daily at 5:30 pm Pacific Time to discuss the latest big climate news!
An Overview of This Year’s Biggest Corporate Climate Commitments
Following a week-plus of corporate sustainability announcements around Earth Day, I’ve pulled together the biggest announcements to take stock of promises made. This list focuses on recent announcements only (i.e., Earth Day 2021), and is limited to public companies.
This list could be useful to you if you’re:
A climate startup looking for enterprise customers who are motivated and publicly accountable towards climate mitigation goals;
An employee / talent looking to understand which employers are leading in this space
An investor looking to identify new Climate Money opportunities made possible by market-anchoring corporate buyers
A consumer who wants to understand which brands are worth your money and attention
Why corporations matter
Whether you’re naturally skeptical of corporate proclamations, like I am, or you’re hopeful that this could signal the turning of the tide, we know that corporations responding to consumption demand are responsible for the majority of global emissions and so are a promising place to make change.
As a skeptical optimist who likes measurement, I believe we should be simultaneously critical and encouraging, and give every entity and person a chance to do right — but we should also be keeping track. As with most things, what matters isn’t promises made, but promises delivered.
I’d love to hear your thoughts in the Substack comments or on Twitter.
Albertsons
$62.5B in revenue
$8.9B market cap
325,000 employees
Earth Day commitments
Committing to the Science Based Targets initiative and onboarding more renewable energy
Big Deal or Bad Deal
Big deal, given Albertsons’ massive retail footprint. 2,253 stores x an average square footage of 46,000 sq. feet creates a lot of surface area for deploying renewables and efficiency.
Detail
Albertsons, the second largest supermarket chain the US with 2,253 stores including Safeway, Randalls, Vons, Haggen, Pavilions, Lucky and 7 other subsidiaries, announced their commitment to the Science Based Targets initiative as well as upcoming (but still undefined) carbon emissions reduction targets that they say are in line with the Paris Agreement goals.
Albertsons is already one of the EPA’s major retail partners for their Green Power Partnership program to source renewable energy for their store operations, and recently signed a partnership with Google to bring Cloud, Recommendations, Search and Maps services to their customer experience in an effort to modernize and compete with Amazon and other online retailers. It’s hard to say whether this partnership had any affect on Albertsons’ climate commitments, but if so, that suggests that partner / vendor / supplier pressure could start to create a snowball effect towards climate action within corporate America.
Read more
Apple
$274.5B in revenue
$2.25T market cap
147,000 employees
Earth Day commitments
Launching a $200M forestry investment fund for carbon removal.
Big Deal or Bad Deal
Big deal. Apple’s getting into the carbon removal / carbon markets business directly, which not only sends a message but also simultaneously creates competition and supply in a supply-constrained market. They also have a massive value chain, and swing big weight with their suppliers and stakeholders. Apple’s climate commitment across their complex supply chain will end up roping a bunch of downstream entities into the climate mitigation game, and will likely be blazing a trail in carbon measurement and accounting too.
Detail
Apple has made a lot of moves on climate over the years and has become a more opinionated company overall under Tim Cook’s leadership. Their Earth Day 2021 efforts included launching a $200M carbon removal initiative called the Restore Fund in partnership with Conservation International and Goldman Sachs that’s structured to make investments in forestry projects that can remove at least 1 million tonnes (metric tons) of CO2 annually.
Apple has previously committed to becoming carbon neutral across its full value chain by 2030. The company says it’ll cut 75% of its emissions directly, and plans to use carbon removal to offset the remaining 25%. With so many startups emerging alongside existing players to sell offsets these days, it’s interesting to consider what it means when big players like Apple decide to become direct producers of these offsets — and then sell their excess to others.
Alongside the Restore Fund, Apple also just launched its new AirTag product, which uses recycled materials in both its logic board and its packaging, and which ostensibly cuts down on consumer waste by helping you to keep track of those AirPods.
Read more
Beam Suntory
$3.1B in revenue
$10.8B market cap (for Suntory Beverage & Food, its parent company)
4,800 employees
Earth Day commitments
50% reduction in operational emissions by 2030, and reducing water usage and virgin raw material usage
Big Deal or Bad Deal
It’s great that Beam Suntory is including impact areas other than CO2 emissions (water, materials), but their focus on gas as an alternative energy source doesn’t help with overall GHG emissions, given gas’s role in our major methane problem.
Detail
Beam Suntory, Suntory Holdings’ US-based multinational subsidiary that produces alcoholic beverages, announced sustainability commitments touching its entire supply chain, including:
Reducing greenhouse gas emissions (GHG) by 50 percent across direct operations by 2030, with an ambition to remove more carbon than is emitted across the entire value chain by 2040. They’re opening a new renewables-powered distillery in Kentucky later this year, and have said they want to transition more of their distilleries and other sites to renewables or to gas (whose actual climate-friendliness is highly questionable).
Reducing water usage for every unit of production by 50 percent by 2030 and replenishing more water than what is used in direct operations to water sources by 2040
Planting 500,000 trees every year by 2030, in order to make up for all the trees harvested to make their whiskey barrels.
Bringing circularity into their packaging by using 100% recyclable packaging and 40% recycled materials by weight for packaging by 2030.
Putting pressure on their suppliers to use “sustainable practices” by 2040, though it’s unclear what this means.
Read more
BMO Capital
$20.3B in revenue
$61B market cap
7,000 employees
Earth Day commitments
30% reduction in operational emissions by 2030, net-zero financed emissions by 2050
Big Deal or Bad Deal
This one’s a mixed bag. In theory, as lending and other financing dries up for polluting industries, that money will get reallocated to other assets, including clean energy projects, infrastructure decarbonization and more. In practice, banks are making broad, sweeping commitments like “net zero financed emissions” without closing loopholes — like the ability to finance utilities with large fossil fuel holdings even as they commit to divesting from direct fossil fuel investments — or bringing accountability to their boards of directors. This one sounds really good, but isn’t being implemented in a way that lives up to the hype. See the Read More section below.
Detail
BMO is a major global investment bank headquartered in Canada and the 8th largest investment bank in North America. They’ve had a commitment to carbon neutrality in their operations since 2010, rolled out a long list of additional climate moves for Earth Day 2021, including:
Emissions reduction. BMO set a new target to reduce operational GHGs by 30% by 2030 versus a 2019 baseline.
Net-zero financed emissions. They also set a net zero financed emissions by 2050 target for their lending practice, which also includes more intermediate (2030) targets for reductions to financed emissions. Critically, BMO is committing to reporting on their net-zero financed emissions emissions goals every year, starting this year.
Banding together in industry alliances for climate action. BMO joined the Net Zero Asset Managers Alliance, Climate Action 100+, the Institutional Investors Group on Climate Change, the Equator Principles Steering Committee and the Cross-Sector Biodiversity Initiative. That’s a lot of clubs, and BMO is essentially signaling that they are a climate-forward finance brand that wants to be a leader, not a laggard, on climate action.
Read more
Citigroup
$74.3B in revenue
$148.9B market cap
210,000 employees
Earth Day commitments
Adding ESG data that gets refreshed daily to their client-facing data analytics platform.
Big Deal or Bad Deal
Not a big deal, but not a bad deal either. Is great to incorporate ESG reporting into an analytics layer, but that’s only as good as the data inputs feeding into it, which Citi doesn’t exert a direct impact on.
Detail
In addition to signing on to the Glasgow Financial Alliance for Net Zero Emissions, of a coalition of global financial institutions that have committed to net-zero emissions by 2050 “at the latest” (though this may be dubious, per the entry above), Citi also just added ESG scoring to its client-facing data analytics platform, Citi Velocity Clarity, that’s used by custody clients, traders and analysts. While this doesn’t feel like a groundbreaking climate move, the fact that they’ll be updating ESG scoring at a daily cadence does feel meaningful; it draws a direct connection between short term financial decision-making and long-term outcomes. Adding ESG data to their analytics suite also pairs well with the recent implementation rollout of the European Union’s Sustainable Finance Disclosure Regulation (SFDR), which acknowledges that you get what you measure.
Delta
$47B in revenue
$29.7B market cap
91,000 employees
Earth Day commitments
$30 million for offsets and growing their investments in sustainable aviation fuels
Big Deal or Bad Deal
Big deal. Frontier innovations like SAFs need guaranteed demand in order to finance further research, development and scale, and Delta’s commitment here will help anchor the market.
Detail
Delta released an updated “carbon neutrality plan” on Earth Day, outlining how they would become carbon neutral through a combination of massive offsets, greater per-traveler fuel efficiency by upgrading their fleet, and investments in sustainable aviation fuels and carbon sequestration projects.
Offsetting. Delta will be setting aside $30M to offset 13 million metric tons (tonnes) of their 2020 emissions
Upgrading their fleet. Delta transitioned over 200 planes into early retirement in 2020, and is replacing them with planes that have 25% more fuel efficiency per seat.
Sustainable aviation fuels (SAFs). Delta says it plans to replace 10% of its fossil-based jet fuel with sustainable aviation fuels by 2030, and also committed to making investments in this category. Current SAFs can reduce emissions by 80%, and Delta’s big move here is committing to a pre-buy of 70 million gallons of SAF per year — which will go a long way towards creating a cost-efficient market for SAF, even though this would be less than 2% of Delta’s overall annual fuel usage. The two main suppliers they’re looking at here are Gevo and Northwest Advanced Bio-Fuels.
Emerging propulsion technologies. Delta is also looking the innovation space around propulsion, post-combustion emission controls, electric power delivery and fuel cells, but hasn’t made any hard commitments here yet. Still, it’s useful to know this is something that’s on their radar.
Read more
Exxon Mobil
$178.6B in revenue
$235.72B in market cap
72,000 employees
Earth Day commitments
Calling for a $100B fund comprised of public and private money to invest in the development and deployment of carbon capture technology.
Big Deal or Bad Deal
Big deal. While it’s hard to trust Exxon, especially given that they haven’t said how much of the development of this carbon capture center it would finance (vs American taxpayers), there’s clearly potential here. American and British research shows that carbon storage in the Gulf of Mexico’s seabed could be effective just a few miles offshore and in water just 100 feet deep. Certain lawmakers have been trying to get this going since 2019, so having Exxon on board could help (Exxon has spent over $250M on lobbying and political campaigns over the past 20 years).
Detail
Exxon has one of the worst corporate brands in the climate change narrative ecosystem, and with good reason. Search results for anything related to Exxon and climate are dominated by scientific and journalistic reporting, as well as personal accounts of Exxon’s decades of damaging climate denial work. That said, the company has been making a small but important shift in recent months, most importantly its pre-Earth Day push for $100B in public and private money to invest in carbon capture technology and operations, centered in Houston. Exxon is positioning itself to spearhead this effort following their announcement of a separate $3B fund to invest in carbon capture projects, but notably is not offering to foot the entire bill — that’s what US taxpayers are for.
Read more
Fedex
$17.4B in revenue
73.2B market cap
600,000 employees
Earth Day commitments
Launched their first ever sustainable bond, raising $3.25B in a single day, and pledging $2B towards EVs, carbon capture, and sustainable aviation fuels.
Big Deal or Bad Deal
Big deal. That $3.25B will go a long way towards financing FedEx’s climate initiatives, and given their multi-industry, global reach, this company will help anchor new verticals by being a huge first customer.
Detail
FedEx made two very big climate moves around Earth Day:
Fedex launched its first sustainable bond in the EU during Earth Week, and will use it to fund initiatives evaluated against a their own FedEx Sustainability Bond Framework that defines 7 eligible areas for use of proceeds from the bond sale: clean transportation, green buildings, energy efficiency, circular economy, pollution prevention and control, renewable energy and socioeconomic empowerment. FedEx raised $3.25B across two tranches last Tuesday, so that’s a lot of climate money coming down the pipe from institutional investors into projects and initiatives that fall into these seven categories.
FedEx’ second big move was to commit $2B towards transitioning its fleet to electric vehicles, carbon capture research, and sustainable aviation fuels. FedEx also pledged $100M of the two billion towards establishing a new Yale Center for Natural Carbon Capture with Yale University.
$181.7B in revenue
$1.56T market cap
135,300 employees (full time)
Earth Day commitments
Full elimination of emissions across Scope 1 and Scope 2
Big Deal or Bad Deal
Big deal. Google has already been a private sector leader in climate initiatives, but moving off of offsets towards true ‘zero’ (not just ‘net-zero’) and expanding their circle of responsibility to include Scope 2 emissions sets a new ‘best in class’ that will pull other corporations’ targets forward.
Detail
Google has been leading on climate action for over a decade now, with goals not just around carbon neutrality but around 100% renewable energy, and full elimination of not just Scope 1 but also Scope 2 emissions.
This Earth Day, they continue to push the envelop and solidify their leadership position. Sundar Pichai announced on Earth Day 2021 that five of their 21 total data centers are now operating on 90% carbon-fee energy, and that the company plans to run every Google data center and office on clean energy 100% of the time within 10 years. Google is also shifting data center backup generation to batteries.
For historical context, Google has already been matching 100% of its global energy usage with equivalent purchases of renewables for the past 4 years and has gone from offsetting to reach carbon neutrality to sourcing clean energy directly and making investments in large-scale battery storage and carbon capture and sequestration.
HP
$56.6B in revenue
$42.6B market cap
59,400 employees
Earth Day commitments
Net-zero across their entire value chain, and a 50% absolute emissions reduction target by 2030.
Big Deal or Bad Deal
HP has established themselves as a trustworthy brand in corporate sustainability, but they could have done more. Their value chain commitment is a big deal, but are they sandbagging the target date by setting it to almost 20 years from now? They’re a huge player that pulls weight around the world. Why not go bigger, faster?
Detail
HP has been making efforts towards sustainability since the 1960s when the company first started recycling its computer punch cards, and was one of the first participants in the EPA’s Energy Star program.
This Earth Day, HP made even more substantial announcements, including a major commitment to net-zero emissions across their entire value chain (including their operations, direct products and global supply chain) by 2040, with a 50% absolute reduction in emissions by 2030, compared with a 2019 baseline. Additional targets and initiatives they announced include:
Zero waste in their operations by 2025
75% circularity for products and packaging by 2030
Zero deforestation for HP paper and paper-based packaging, plus efforts to fight deforestation for non-HP paper that’s used in their products by 2030
A host of partnerships: expansion of HP’s Sustainable Forests Collaborative, sponsorship of the Forest Stewardship Council’s Digital Marketplace, joining Ocean Conservancy’s Trash Free Seas Alliance Steering Committee
Read more
JBS
$50B in revenue
$77.3B market cap
234,000 employees
Earth Day commitments
Not specifically for Earth Day, but announced a zero illegal deforestation goal for their entire supply chain.
Big Deal or Bad Deal
Big deal, IF they follow through. Deforestation driven by the meat industry is a huge threat to tropical forests, and it’s also a gnarly problem marked by broken rules and poor enforcement. If JBS is serious about this, then their role as one of Brazil’s 3rd largest corporation (after Petrobras and a massive bank) will send a powerful message to the government, and could actually make a real difference on the ground.
Detail
Unrelated to Earth Day, JBS, the largest meat processor in the world, has committed to reach net zero emissions by 2040. JBS is a Brazilian company and has been linked to large scale illegal deforestation, so getting to net-zero will be a significant effort. The company has committed to eliminating all illegal deforestation from its entire supply chain, which is challenging given the meat processing industry’s multi-layered supplier hierarchy, with direct suppliers (easy to monitor) getting product from a variety of indirect suppliers (hard to monitor / control).
What’s really important here is that JBS made this announcement not around Earth Day, but the day after it released its Q4 2020 earnings report showcasing all-time record earnings driven by spiking demand from China and a favorable currency exchange rate for the Brazilian Real. It’s easier to commit to the cost center of emissions reduction when you’re flush with cash.
Read more
Nestle
$84B in revenue
$346.3B market cap
352,000 employees
Earth Day commitments
Renewable energy for manufacturing, and regenerative ag for KitKat.
Big Deal or Bad Deal
Bad deal. Nestle could be doing so much more than isolating its climate efforts to a single brand that’s not even close to the top of its portfolio. Nestle also came under fire just after Earth Day for unlawfully draining water from local water ecosystems for its Arrowhead bottled water product. Illegally stealing water from natural ecosystems that serve dozens of communities, and then putting that water into plastic bottles to make a profit, can’t be neutralized by implementing regenerative ag for KitKat bars.
Detail
Nestle is a huge umbrella of sub-brands that are household names within their own right. Apart from creating some feel-good videos and running a bunch of Facebook brand campaigns, Nestle’s primary Earth Day moves were around its KitKat brand. KitKat committed to becoming carbon neutral by 2025, including cutting in half all emissions associated with sourcing ingredients, production/manufacturing and distribution for its products and ostensibly relying on offsets to close the last mile to carbon neutrality.
KitKat’s planning to cut emissions by:
Working with dairy, wheat and sugar producers to implement regenerative agricultural practices (including planting 5 million shade trees on the cocoa plantations it sources from)
Improving energy efficiency in its factories and switching manufacturing sites to 100% renewable energy by 2025
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Nestle is also joining a group of CPG companies partnering with Trees for the Future to plant a million trees from April 14 to May 14. As a savvy climate thinker, you know that planting millions upon millions of trees isn’t the answer, but the partners are also committing to a reduction of paper usage at the same time so it’s a solid “better than nothing” outcome.
Read more
Pepsi
$70B in revenue
$198.4B market cap
69,100 employees
Earth Day commitments
An expansion of regenerative ag and full supply chain decarbonization
Big Deal or Bad Deal
Extending their goals to Scope 3 has the biggest impact here. Attempting to clean up their palm oil sourcing is great, but at a certain scale of demand, deforestation for palm oil is going to be inevitable. It would be interesting to see Pepsi explore alternatives, like fermented palm oil substitutes.
Detail
Pepsi announced that by the end of 2021 it would expand regenerative farming for its products to cover 7 million acres, equal to almost 100% of the land used for its products.
The company also said they’d transition to 100% ‘no deforestation, no peat, no exploitation’ palm oil by the end of 2022 and expand their principles and data reporting to cover their entire palm oil supply chain (Pepsi used 485,000 metric tons of palm oil in 2019).
They’ve also made efforts to extend decarbonization throughout their supply chain, where most emissions are generated, via a commitment to reduce Scope 3 emissions 40 percent by 2030 from a 2015 baseline.
Read more
A short list of group efforts
73 financial institutions aiming for emissions reductions by 2030 and net zero by 2050 (see note under BMO about banks’ mixed record on climate mitigation above)
408+ corporations and SMBs signed an open letter to the Biden administration
Public-private partnership between the US, UK and Norway and companies like Unilever, Amazon, McKinsey and Airbnb to put $1B towards forest protection
Congratulations, you made it to the bottom of this article! A few takeaways that came out of researching it:
Corporate commitments reveal where new opportunities in Climate Money will be when you look at them in aggregate.
Many of these commitments are voluntary. Corporations are responding to both carrots and sticks wielded by consumers, governments and each other. We all play a role.
With all this power to move markets and shape policy, are corporations the new countries? And is that a good thing?
Thanks for reading. If you enjoyed this, please share and subscribe to bring more climate thinkers into the fold!
— Susan