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Green targets take on shades of grey

A cynic might say it was always destined to happen.

Little more than four years ago, with Covid on the horizon but buoyed by the prospect of reducing emissions and increasing stakeholder value, many large companies were falling over themselves to set new or improved ‘green targets’.

Cynics might also say, and I remember some doing so at the time, that if businesses subsequently had to soften those targets or justify why they were off the pace, they would likely be able to cite other firms being in the same boat. Achieving the nitty gritty was hard, they couldn’t do it alone, technology and innovation would need to provide alternatives and measurement methods, and the regulatory environment would need to be supportive.

Fast forward to 2024 and that’s exactly what we seem to be seeing. Companies reducing the ambition of their long-term targets or moving the goalposts is not altogether new. But a Financial Times Big Read article recently took stock of how companies are starting to back away from green targets, saying that some major firms “have in the past year dropped or missed goals to cut emissions or to shrink ties with the most polluting sectors. Others have simply skipped over their promise to improve.”

Many that sought individual headlines in the past to spotlight their commitments may now be seeking to be lumped into a cohort of companies that have backed away from those ambitions, rather than being called out alone.

The finger is being pointed, said the FT piece, squarely at politicians and regulators who are accused of not having created the right frameworks and momentum, so new technologies have not been introduced quickly enough and policy has been unclear. Certainly in the UK, casual observers may well agree with that, but political tussles and shifts in centres of gravity internationally have not helped. Nor has a pandemic, even if it saw a profound short-term dip in emissions.

But reality bites, eventually. Alongside the complaints that companies have not had the governmental collaboration they need, some are expressing that net zero is complex and extremely hard. Again, a cynic might say anyone could have seen that coming, when the aims were set.

The FT piece has an interesting interactive graph that outlines how targets have changed and who has been doing so. It concludes that the next phase of net zero programmes will be particularly challenging for companies, compared to the initial few years.

Putting corporate targets to one side though, the broader picture is that markets and nations continue to support sustained emissions reduction and that real progress is being made. An announcement by the new Mission 2025 coalition this week, backed by several large companies, declared that “More than two-thirds of annual revenues across the world's biggest companies, totalling $31 trillion, was now aligned with the quest to reach net-zero emissions.”

The EU this week backed a €650 billion plan to help cities achieve net zero.

The Labour Party, riding high in current polls, said that if it forms the next UK Government it will create a new department for net zero to support the green transition.

For communicators, there has long been an understanding around green targets that while words matter, companies will ultimately be judged on their actions. But as the action required becomes more difficult and more complicated, the words will need to be even more carefully-considered, and in lock-step with it.

What would those cynics say? Well they might say that such lofty, relatively quick-turn goals were always going to be unrealistic for many businesses, and some back-tracking was always likely. But the more pragmatic amongst them may also say that it was never going to be straightforward, and that the road ahead would get harder.

Investors, above all others, will expect detail and hard facts, not shades of grey around green targets as those ambitious deadlines - revised or not - creep nearer.

Once the finger-pointing has abated a little, companies will be under greater pressure to demonstrate what they’re going to do and how, and who else they need on board to make it happen.

Written by

Steve Earl, partner at PR agency BOLDT.

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