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PepsiCo gets A for net-zero emissions efforts

Environmental and social responsibility nonprofit As You Sow ranked 55 companies across 11 sectors based on their progress toward achieving net-zero greenhouse gas emissions in a report released Thursday.

Each company received a grade from A to F, with disclosures of emissions counting for 22% of the grade, emission-reduction targets counting for 33% and actual reductions in emissions 45%.

Here are some notable supply chain companies’ and retailers’ grades:

  • PepsiCo Inc. got an A.
  • Prologis Inc. got a C-plus.
  • Coca-Cola got a D-plus.
  • Boeing got a D.
  • United Parcel Service got a D.
  • General Motors got a D.
  • Walmart got a D.
  • ConocoPhillips got a D-minus.
  • Lowe’s got a D-minus.
  • Chevron Corp. got an F.
  • ExxonMobil Corp. got an F.
  • Home Depot Inc. got an F.
  • Union Pacific Railroad got an F.
  • Berkshire Hathaway Inc. got an F.
  • Tesla Inc. got an F.

While 90% of companies assessed report scope 1 (direct) and scope 2 (indirect) emissions, 64% do not disclose scope 3 emissions, which are product-related emissions and emissions that occur along their supply chains. 

Companies are starting to ask their suppliers about their emissions and environmental impacts to get a better picture of their scope 3 emissions.

“Actually asking those questions will indicate to suppliers that it’s important that they have answers. The suppliers need to also be transitioning to net-zero. And as suppliers transition to net-zero … we start seeing movement along that supply chain,” Danielle Fugere, president and chief counsel at As You Sow, said during a webinar about the report. “Pressure might start from a company with multiple suppliers. Those suppliers then need to go down their supply chains, and what you have is movement throughout the economy and across supply chains that helps all companies reduce to net-zero.”

Read: Report: Climate change ‘creating shocks to global trade’

Why scopes matter

Oil and gas companies are reducing their scope 1 and 2 emissions, but that doesn’t make a big enough impact when nearly 90% of their emissions are scope 3 and not included in emissions disclosures, targets or reductions, David Shugar, manager of the Say on Climate Initiative and environmental, social and governance and climate data analyst at As You Sow, said during the webinar.

Scope 3 emissions often make up a large portion of retailers’ and other companies’ total emissions, so excluding them from disclosures and emission-reduction targets can misrepresent their climate impacts. Shugar said only one-third of companies assessed disclose their scope 3 emissions.

Net-zero emissions targets, on the other hand, are a dime a dozen these days. What matters is the timeline, the scopes included and whether the net-zero target is in line with the Paris Agreement’s pathway to keep average temperature increases below 1.5 degrees Celsius.

The Science Based Targets Initiative (SBTi) released a comprehensive guide for setting net-zero emissions targets based on climate science in 2021. One big component of effective net-zero targets is that they focus on reducing emissions rather than carbon offsets.

Of the assessed companies, 12 have set net-zero emissions targets across all scopes, but none have committed to avoid using carbon offsets to get to net-zero, the report said. SBTi and other organizations have stressed the importance of reducing absolute emissions and improving carbon intensity instead of relying on carbon offsets.

“Carbon offsets cannot substitute for on-the-ground reductions by companies,” Shugar said. “To achieve net-zero emissions, companies must take action at the level of their own operations and supply chains. Purchasing carbon offsets will not solve the climate crisis.”

The SBTi is in the process of clarifying what should count as permanent removal of carbon from the atmosphere to account for unavoidable emissions after companies have reduced their absolute emissions by about 90%, Cynthia Cummis, co-founder and technical director of SBTi, said during the webinar.

Click here for more FreightWaves articles by Alyssa Sporrer.

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