Corporate climate commitments don’t mean anything without accountability

As the world’s governments continue to balk at taking the necessary aggressive action, more and more companies are announcing what appear to be bold climate commitments, stepping up to take action where countries are not.
People in suits sitting around while the world is exploding in fumes

As the world’s governments continue to balk at taking the necessary aggressive action, more and more companies are announcing what appear to be bold climate commitments, stepping up to take action where countries are not.

But while more than 3,000 businesses have made commitments within initiatives of the UNFCCC’s Race to Zero campaign, that’s a drop in the bucket. Only 42.8% of Russell 1000 companies have disclosed a commitment to reducing emissions, with only about 26% having more rigorous commitments including Net Zero by 2050 or an approved science based target. You might conclude that we need more climate commitments.

And yet, on the other side, commitments are coming under more and more criticism. Long-term commitments are, according to activists like Greta Thunberg, “being used as excuses to postpone real action.” The concept of net zero is being targeted as not appropriate to individual entities like corporations, rendering such commitments not only potentially weak, but irrelevant.

How to bridge the gap between these perspectives? More action is necessary, and commitments are one way to do that, but rather than focus on the commitments themselves, let’s focus on accountability to the commitments.

Accountability can ensure that the commitments being made are meaningful: ambitious and aligned with the science on timelines, including in their scope the things that matter (like all emissions from a product’s supply chain and use, and the greenhouse gases beyond carbon), and the methods to achieve them (i.e. direct reductions, removals, offsets, and so on). It also ensures that the commitments are actually upheld—not only by the “end date” of the commitment, but in regular increments that demonstrate that the end goal is actually feasible and on track.

Where commitments are valuable are as a means to enable accountability. Once a commitment is made, that commitment can be scrutinized and evaluated. It’s not all negative: the right commitments can be applauded and praised for positive reinforcement. When necessary, they can be criticized and condemned. But once a commitment is made, transparency needs to follow. Lack of transparency can itself be criticized, and when we have transparency, it’s possible to ensure that companies are living up to their commitments on a regular basis and following through with the proportionate level of action and achievement of results towards their end goal.

Still, accountability isn’t easy, even for perceived sustainability leaders. Speaking from experience, where I work at B Lab we developed a Net Zero 2030 campaign in 2019 in which Certified B Corporations (companies who meet high standards of social and environmental performance, accountability, and transparency) and other companies committed to achieve net zero emissions by 2030. The ambitious commitment has resonated globally, with more than 1,500 businesses now signed on, but as of today, amidst the economic challenges of the pandemic, many of the companies in the commitment have yet to follow through on the subsequent necessary actions.

To address this, we’re working on improved accountability mechanisms and enabling resources for those who have committed. We’re also in the process of considering how more specific actions, including ambitious climate action, should be incorporated as part of B Corp Certification requirements for all companies.

But we are just one initiative and stakeholder in a broader accountability system that can work in concert with one another. Accountability comes from all of us. Youth activists like Greta Thunberg, Ashley Lashley, and Umuhoza Grace Ineza remind us of the end goal, the consequences of failure, and create accountability to ensure that the risks of these ambitions don’t disproportionately affect those most marginalized and least responsible (and hopefully the benefits do disproportionately advantage those same groups).

Policymakers can set the bar to ensure that companies aren’t able to avoid their responsibility, and can also enact policies to ensure that all corporate entities are themselves accountable and required to consider stakeholder interests in their decisions. Investors can allocate, and withhold, capital from companies.

NGOs and initiatives like Race to Zero, the Science Based Targets initiative, B Lab, and others can provide the infrastructure to both define and support the companies who are willing to lead and demonstrate the path for others to follow. Consumers, workers, and citizens can hold companies to account by pushing the companies that they have influence over to go further and do more, in the absence of or in addition to regulation.

A proper system of accountability needs to acknowledge that the most critical accountability can and should come from the actors that are most responsible—the companies and their composite combination of executives, board members, and other decision makers that comprise the “corporate person” but are also human beings themselves. Those people should know that the climate emergency not only affects your business and your loved ones, but you and your own moral obligations. You—and all of us—are responsible, and so it’s your job to take action. The rest of us will be there to make sure you do it and help you along the way.

Dan Osusky is the Head of Standards and Insights at B Lab, a global network of organizations transforming the global economic system. Dan is responsible for managing the performance requirements for the B Corp Certification as well as the content of the B Impact Assessment, the social and environmental performance measurement and management tool used  to measure, compare, manage, and improve their impact on stakeholders including workers, community, customers, and the environment.