How to tell if companies are really cutting emissions

Deciphering the language of carbon emissions has become increasingly challenging.
It is difficult to determine whether a business is genuinely reducing its emissions, if those reductions align with the levels needed to maintain global temperatures to reach Paris Agreement targets, and to assess whether the company is engaging in greenwashing or making meaningful progress toward achieving its targets.
Reporting emission inventories publicly is one way that people are able to understand the situation. It makes sense to think that if companies are able to produce an annual emission inventory report then it becomes easier to see if they are actually decarbonising.
However, reporting issues can make it difficult to understand the full context of a company’s impact, as companies often produce multiple reports (e.g., sustainability reports, climate roadmaps) that must be read together for clarity. Additionally, specialised language in the carbon space and occasional greenwashing can further obscure the true extent of a company’s actions and impact.
One way to resolve some of these issues is to have an objective transparent evaluation of the reports.
This can help to make sense of the company’s activities and demystify aspects of reporting and the language of the carbon space; hold companies to account for their targets and progress towards them; and help showcase some of the mahi happening to reduce carbon and encourage learning across businesses. It can benchmark and support best practice.
A team of us has been working on producing a transparent system that meets these three aims.
Based on international systems and the Climate Action Scorecard we have launched the Climate Action Tracker Aotearoa (CATA).
CATA evaluates the climate action being taken by some of the top carbon emitters in New Zealand.
We have taken the top 10 emitters from the Environmental Protection Agency website and then added in some other companies in the sector to see how they are going.
In addition, we will add a different sector each year. This year we have focused on banking. We have used only publicly available data, information anyone is able to obtain from the company websites and verifiers like Toitū Envirocare.
The evaluations focus on three areas: emission targets, plans to meet targets, and reporting on progress.  
We have assessed carbon reduction targets, in particular, 2030 targets and details as well as 2050 net zero targets.
We have looked to see if the targets align with the Paris Agreement through the Science Based Target Initiative. Having 2030 targets is important because they signal mitigation in line with a more orderly decarbonisation.
Overall, the majority of the companies we evaluated had 2030 targets and most of these targets are absolute targets, as shown in the pie diagram below. This means that they are absolute reduction to the bottom line of emissions – not per unit of output.
However, we found that not many of the targets have been externally verified so are not recognised in the Science-based Targets Initiative.
The 2050 net zero targets signal that the company is going to be able to reach net carbon zero by that year.
While 76 per cent of companies have 2050 targets we find that there is often little detail to explain how net zero will be achieved. Nearly half had no details, 33 per cent had detailed but unvalidated plans, and 19 per cent had some high level plans.
We have reviewed the amount of detail shown in the carbon emission reduction plans and found that most planning was still at the very high end.
Finally, we analysed the level of reporting by each company. Transparency can be seen through practices like reporting annually, including historical emissions, accountability, just transitions and in the context of Aotearoa New Zealand including Te Tiriti partnerships and engagement with climate action. Only one of the 21 companies was not reporting on emissions annually.
One aspect we were interested in was the formal accountability for reaching targets and climate action goals. We found accountability for climate goals was varied. Best practice is for senior management and the board to be accountable for reaching the espoused targets and we only saw that in 42 percemt of the companies.
The goal of CATA is to increase transparency and accountability within and across sectors, and to encourage more companies to increase their climate action efforts.
We want to make it clear how companies are tracking with climate action for stakeholders, partners, consumers, investors and regulators to be able to make better informed decisions and organisations to reach best practice globally.