A new ESG report Book reveals that the vast majority of the world's largest companies have done virtually nothing over the last five years to reduce the pollution that contributes to catastrophic climate change. According to the report, these companies are more likely to contribute to extreme levels of warming or are not disclosing their greenhouse gas emissions.
The study, which analyzed the 500 largest public companies in the world in terms of market value, found that only 22% of them are in line with the goals of the Paris Agreement, which seeks to limit global warming to 1.5 degrees Celsius above pre- -industrial. This number represents a negligible increase from the 18% recorded in 2018.
Climate scientists regard a 1.5 degree Celsius rise in global average temperature as a critical tipping point, beyond which negative impacts such as floods, droughts, wildfires and food shortages could become significantly more severe.
Worryingly, 45% of the analyzed companies are aligned with warming of at least 2.7 degrees Celsius, a disastrous level that would put billions of people in dangerously hot conditions. That number is down from the 61% recorded in 2018.
The CEO of ESG Book, Daniel Klier, highlighted the need for a fundamental change in the way the global economy operates, emphasizing that more needs to be done and faster to address this crisis. The report indicates that progress has been slow and that concerted action is needed, including stricter government policies, changes in consumer behavior and technological advances.
The study also highlighted the importance of institutional investors, such as pension funds, in directing more capital into renewable technologies. While there are encouraging signs, such as increased investment in solar energy relative to oil production, significant capital inflows are still expected into sectors such as oil, gas and coal, which are not in line with global climate targets.
The analysis included companies with a market capitalization of at least US$ 10 billion in the United States, United Kingdom, China, India and the European Union.
Both direct emissions from the companies' operations and indirect emissions resulting from the use of their products were considered. This aspect is particularly relevant for companies in the oil and gas sector, since most of their emissions are generated by burning products such as gasoline and aviation fuel.
With current perspectives, the World Meteorological Organization warned that there is a 66% chance of the planet's temperature rising above 1.5 degrees Celsius in the next five years, which highlights the accelerated pace of climate change and the negative impacts that are to come.
The ESG Book report underscores the urgency of concrete action by businesses and the global community to tackle the climate crisis and avoid its devastating consequences.
The Environmental Impact of Large Companies: Challenges and Consequences
The world's big polluting companies have a significant impact on the environment in many ways. Here are some of the top ways these companies are impacting the environment:
- Greenhouse gas emissions: Companies that extract, produce and burn fossil fuels such as oil, natural gas and coal are responsible for a significant portion of global greenhouse gas emissions. These emissions contribute to global warming and climate change, leading to extreme weather events, sea level rise and disruption to ecosystems.
- Air and water pollution: The industrial operations of large polluting companies often result in the emission of pollutants into the air, such as sulfur dioxide, nitrogen oxides, fine particles and volatile organic compounds. These pollutants have adverse effects on air quality and human health. In addition, industrial activities can also cause water contamination through leaks of chemical substances, improper disposal of waste and pollution of rivers and oceans.
- Degradation of ecosystems: Large polluting companies are often involved in the exploitation of natural resources such as forests and protected areas. These activities can lead to the destruction of natural habitats, loss of biodiversity and imbalance in ecosystems. For example, oil extraction and mining can result in the destruction of forests and the pollution of rivers, affecting wildlife and aquatic ecosystems.
- Waste and Waste Disposal: Large companies often generate large amounts of waste, including toxic and hazardous materials. Improper disposal of this waste can contaminate soil, water and air, harming human health and ecosystems. In addition, the waste of natural and energy resources is also a problem, with many companies adopting unsustainable production and consumption practices.
- Irresponsible resource exploitation: Some large polluting companies are involved in irresponsible natural resource exploitation practices, such as oil exploration in sensitive areas, rampant deforestation and mining in ecologically important locations. These activities have direct impacts on the destruction of ecosystems and loss of habitats for endangered species.
These are just a few examples of the negative impacts that large polluting companies have on the environment. However, it is important to note that there is increasing pressure on these companies to adopt more sustainable practices and reduce their environmental impact. Public awareness, stricter government regulations and the search for clean energy alternatives are some of the factors driving change in these companies. Many of them are starting to take steps to reduce their environmental footprint, such as investing in renewable energy, improving energy efficiency, implementing more responsible waste management practices and setting emission reduction targets.
There are several large companies that are known for their significant contribution to environmental pollution in the energy sector. Some notable examples include:
- Saudi Aramco: Saudi Aramco is the world's largest oil company and a major emitter of greenhouse gases due to the production and burning of crude oil.
- ExxonMobil: ExxonMobil is one of the world's largest oil and gas companies, with a long history of contributing to greenhouse gas emissions through its exploration, production and refining activities.
- Chevron: Chevron is another global oil company that has a significant impact on the environment, especially due to oil extraction and production in sensitive areas such as the Amazon.
- Gazprom: Gazprom is the world's largest natural gas company and its gas production, transportation and distribution operations have a considerable impact on greenhouse gas emissions.
- Coal India Limited: As the world's largest coal mining company, Coal India Limited is responsible for a significant amount of carbon dioxide emissions associated with the burning of coal.
- RWE: RWE is one of Europe's largest electricity companies and is widely known for its reliance on coal for electricity production, which makes it a major emitter of greenhouse gases.
Pressure from consumers and investors for greater transparency and environmental responsibility is also leading companies to reassess their practices and adopt more sustainable strategies. Companies are increasingly realizing that sustainability is not just an environmental issue, but also a matter of long-term competitiveness and resilience.
It is important to recognize that there is still a long way to go. Many companies face challenges in transitioning to a low-carbon economy, as it requires significant investments, structural changes and a shift in mindset. Furthermore, some companies may be reluctant to adopt sustainable practices due to short-term economic interests.
With the growing awareness of the urgency of climate change and the negative impacts of environmental pollution, polluting companies are expected to be increasingly pressured to adopt more responsible and sustainable practices. The transition to a greener and more sustainable economy depends not only on the actions of companies, but also on a collective effort involving governments, civil society and conscious consumers.
