The consequences of much of the corporate world turning its back on carbon reduction commitments
MARCO MAGRINI
‘It is quite worrying, the future of the world. We need to appeal to the people and educate them to sort of revolt against this and to fight the propaganda of the fossil fuel industry which is unrelenting and enormous.’ Thus spoke, in 2016, the CEO of a glamorous electric car company, at that time a champion of the clean energy revolution. Climate champion he is no more.
The already fragile consensus on corporate climate responsibility is creaking. Some of the world’s most influential corporations are retreating from the climate commitments – long suspected of ‘greenwashing’ – they once flaunted. Their net-zero pledges and roadmaps are now fading. The era of ‘greenfading’ – when sustainability pledges quietly dissolve – has begun.
To tell the truth, success was already scarce. Last year, according to Accenture, only 16 percent of the world’s largest companies were on track to reach net zero emissions by 2050, while nearly half of them (45 percent) had in reality increased their emissions. But then, the political landscape shifted abruptly.
Just weeks after the US presidential election, several prominent banks (as mentioned in last month’s ClimateWatch) including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs, withdrew from the Net Zero Banking Alliance, a coalition established to align lending and investment practices with the goal of net zero emissions by 2050. Many of the largest banks in Canada – TD Bank, Bank of Montreal, National Bank of Canada, Canadian Imperial and Scotiabank – followed suit. The world's largest asset manager, BlackRock, exited the Net Zero Asset Managers climate alliance, which in turn immediately suspended its operations. In Europe, HSBC, once lauded for its bold climate targets, has then delayed its net-zero goal by two decades.
Already one year ago, Shell had scaled down its carbon emissions reduction targets. But last February BP shocked the world of climate observers announcing a ‘fundamental reset’ of its ‘net-zero by 2050’ strategy. The new plan is simple: reducing investments in clean energy sources and ramping up those in fossil fuels.
If there was once a suspicion that all those commitments were merely greenwashing schemes, no doubt is now left. However, such a practice of, let’s say, ‘deceptive environmental advertising’ has also been a victim of its own lunacy: some of the much-touted green commitments were simply too ambitious. ‘We went too far, too fast,’ said BP’s boss Murray Auchincloss to justify their about-turn. The average tenure of CEOs is currently around 6.9 years – how easy could be, to promise something that is expected to happen 25 year later?
Naturally, not every multinational sees sustainability as a cost, or a nuisance. Archer Daniels Midland (ADM), one of the big five commodities traders, has just reaffirmed its climate goals. It has already converted 3 million acres to regenerative agriculture saving 264,000 metric tons of CO₂ emissions a year and now plans to further expand its sustainable footprint. Of course, it won’t be the only one. On the other hand, economic competition, not politics, may force a change of plans. Microsoft has just backtracked from its (ambitious yet serious) climate goals, because of the enormous energy appetite of booming AI.
However, the shifting political scene was the heavy straw that broke the camel’s back. The return of a US administration favoring deregulation and fossil fuel expansion with renewed fervor, has sparked off the ’greenfading’ trend, probably even more than expected. And it comes precisely at the wrong moment.
It is worth to remember that none of the aforementioned companies are to be held accountable, nor are due to be sanctioned, for not respecting their goals. The same could be said of the Paris Accord – emissions cuts are voluntary and no country can be sanctioned – yet the White House decided to leave it anyway. It is a grandiose retreat from responsibility, when the climate crisis demanded nothing less than unwavering commitment – from countries and big companies alike.
In our multipolar world, multilateralism seems to be out of fashion. The unilateral decision to withdraw from the World Health Organization (while avian flu is infecting people in the USA), to exit the United Nations Human Rights Council (while human rights are being trampled somewhere) and to shut down USAID (while millions of people need food and vaccines) will reverberate throughout the planet for years to come.
No one can really foresee the ripple effects of these choices. But they will be bad, broad and – as far as climate is concerned – will add to the green-fading mess.
Published on the April 2025 issue of Geographical Magazine