Nestlé’s failing net-zero plan and methane blindspot exposed ahead of its AGM
Image source: Changing Markets
Despite Nestlé claiming it will “spend big” to reach 50 percent emissions reductions by 2050, it is failing to meet all nine of the relevant net-zero standards released last year by the United Nations, according to a report released this week by the Changing Markets Foundation showcases.
Campaigners have raised the red flag, lighting up the night sky with projections on Nestlé’s headquarters while shareholders and board members alike come together for the company’s annual general meeting. Nestlé’s net zero target is a joke, one of the projections says. Reduce your methane emissions, and come clean now, insists another.
Changing Markets Foundation’s report locks onto Nestlé’s methane emissions, which it estimates are the equivalent of double the entire livestock sector of Switzerland. Despite Nestlé outsized methane contribution compared to other emissions, it has has no dedicated target for reducing these noxious emissions. In the last five years the company has only reduced its overall emissions by 1 percent.
But Nestlé is shouting loud to its consumers, shareholders and investors about their target to hit 50 percent emissions reductions by 2030. In reality, one analysis projects that they won’t even get near to achieving half that goal.
The report builds on earlier research this year from NewClimate Institute and Carbon Market Watch, which showcases how Nestlé’s net zero target, like those of numerous other major corporations, is riddled with flaws. This matters because Nestlé sells its products in 188 countries. Its brands and associated misleading climate claims reach millions of people.
Not what it says on the tin
Campaigners’ actions and the release of these reports showcase the gaps in Nestlé’s net zero plans, but also highlights a wider problem. Voluntary business climate action is not working. Without governments stepping in – mandating science-aligned targets that take into account all emissions, that are free of problematic carbon offsetting and are transparent and verifiable – companies will always face reputational risk for the claims that they make. Consumers will always be misled, and emissions reductions will never be what they say on the tin.
It’s not just methane emissions that Nestlé is in hot water over. Despite claims from the company that it does not use carbon offsets to meet its target, its brands do use carbon offsets for their “carbon neutrality” claims, and Nestlé itself uses something called insetting.
What is insetting?
Insetting uses the exact same principles as offsetting, except the company uses an emissions reduction or removal from within its own operations or value chain to supposedly cancel out emissions it’s releasing elsewhere. For example, Nestlé may fund agroforestry (the planting of trees and shrubs amongst crops) on farms that it sources ingredients from. The estimated carbon savings from this practice are then used to counter emissions released elsewhere in the business.
On paper it sounds like a win-win, but emissions need to be cut across the board. Using emissions cuts in one part of a business’s operations to counter emissions in another diminishes the action. These ‘insets’ haven’t gone through a igorough external validation process in the same way that verified carbon offsetting projects have. Although these verification processes have recently been proven to not always lead to environmental integrity, they atleast create some checks and balances that insetting does not face. By using insets the company runs the risk of double counting emissions savings.
What are the standards Nestlé should be reaching?
At the UN Climate Summit in 2021 (COP26), the UN Secretary General, António Guterres, announced a new UN High Level Expert Group on Net Zero. Their task was to address the growing non-state actor net zero problem – what should ‘good’ look like, where do some of the current loopholes exist, and how do we regulate our way out of this mess? The expert group released a report titled Integrity Matters the following year at COP27, alongside a call from Mr. Guterres:
“Abide by this standard and update your guidelines right away – and certainly not later than COP28.”
The recommendations were clear that deep emissions reductions must come first across a company’s entire value chain, which would include Nestlé’s methane emissions. They also make it clear that carbon offsetting should not be used unless of a very high integrity, and these should not be used to reach interim targets. By relying on insetting and allowing affiliated brands to use carbon offsets for carbon neutrality claims, the company is falling short of these standards.
The Global Methane Pledge was also launched at COP26, which brings heads of state around the world together in an agreement to cut methane emissions by 30 percent by 2030. Nestle’s lack of clear and separate target for methane means that its cuts fall well short of this pledge.
What is happening or needs to happen from governments?
In the last year, moves have started to be made to attempt to regulate the use of carbon credits for offsetting. The EU is currently working and voting on a string of proposals – “Empowering Consumers, and the green transition and the Green Claims Directive” – that if strong enough, could prohibit carbon neutrality claims from brands like those affiliated to Nestlé. The Green Claims proposal could strengthen verification processes that could significantly change the standards companies’ green claims have to meet before they are allowed. However, there is a long way to go to ensure these regulations are made as strong as possible and subsequently enforced once they are voted through.
More broadly, campaigners are calling for governments to step up and mandate companies to align with the UN recommendations. Companies need to be held accountable for the claims they are making, all emissions need to be addressed, and transparency needs to be prioritised so the world can clearly see what real emissions reductions look like.
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