Five years into the critical decade for climate action, the Corporate Climate Responsibility Monitor highlights the urgent need to curb the soaring emissions of big tech, fast fashion, automotive and agrifood companies. With emissions reporting still lacking, large corporations must anchor commitments in clear and unmistakable targets, substantiate them with concrete action plans, and inform the public about progress and setbacks. Regulators worldwide need to create an environment in which corporate climate action is a business necessity rather than a voluntary sidejob.
With each sector facing its own challenges, key transition measures help companies to tackle meaningful bottlenecks and major emission sources. These are not yet fully integrated into legislation and corporate accountability standards.
Good examples of climate leadership by isolated companies should become blueprints for action. Currently, they are overshadowed by sectoral lethargy.
A wide variety of creative accounting (mal)practices are blurring the real status of corporate progress, with cross-sector use of market-based electricity accounting, the premature use of environmental attribute certificates, and carbon credits.
Many companies still claim to be carbon neutral, basing their misleading communication on the purchase and use of carbon credits. Moreover, many fail to disclose crucial information about the details of these purchases.
Geopolitical circumstances and the current political climate underpin the growing need for climate action to be embedded in robust regulation and for voluntary initiatives to become more stringent and robust.
“Government regulation is the backbone of climate action. Only in an ecosystem where regulators lay the groundwork for implementing mitigation measures can different players fulfil their potential. This would enable the private sector to set and implement meaningful targets, the corporate accountability frameworks to validate and verify corporate climate plans, and civil society to effectively scrutinise and hold to account large corporations. However, this kind of regulatory framework is, unfortunately, missing in government inaction.”
Benja Faecks – Expert on Global Carbon Markets, Carbon Market Watch
Our demands
No space for creative accounting
There is no room for shaky or dubious climate claims, when it comes to carbon credits, energy contracts or any other construct. Creative accounting is not a valid way to reach emission reduction targets. All claims must be accurate, transparent and substantiated.
Credible beyond value chain mitigation strategies
Carbon credits are one of the many tools for financing mitigation activities beyond a company’s own operations and those of its suppliers. They must be used as a supplement to, not as a substitute for, value chain emission reductions, and companies should communicate about their use with clarity and honesty.
Regulation over voluntary action
Regulators need to double down on ambitious legislation that facilitates both sector and economy-wide transitions towards a 1.5°C-compatible future instead of relying on voluntary frameworks.
More benchmarking for sectoral transitions
With clear blueprints for sectoral transitions unavailable, regulators and corporate accountability standards need to draw up clear guidance for each sector. More research is needed in some areas for the benchmarking of measures against climate scenarios.
Revamping voluntary standards
In the second wave of the development and adoption of corporate accountability frameworks, the focus should shift away from getting as many companies on board to bolstering the integrity and ambition of those who receive these seals of approval.
Find out more
Sectors
You can find more information about the 2025 Corporate Climate Responsibility Monitor methodology here.
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