Long-term corporate climate change targets: What could they deliver?

Driven by the rising cost of energy, stakeholder pressure and the expectation that governments will continue to implement policy measures directed at reducing greenhouse gas emissions, an increasing number of companies have set targets to reduce their greenhouse gas emissions. These commitments raise two important questions. The first is whether they can be considered - individually or collectively - to be an appropriate response to the threat presented by climate change. The second is whether they are dependable; that is, can policy makers and other stakeholders can rely on companies to deliver on the commitments that they have made?This article examines these two questions using the case of the UK supermarket sector to illustrate and explain the issues at stake and, more generally, to examine the contribution that these types of voluntary commitments can make to wider public policy goals on climate change. The reasons for focusing on the UK supermarket sector are that the companies in this sector are some of the largest retailers in the world, they are significant emitters (their direct emissions account for 0.9% of UK carbon emissions, and some indications suggest that their indirect emissions account for ten times as much), and they are less heavily regulated that other sectors with comparable carbon footprints.The article concludes that the targets being set voluntarily by companies in this sector align with, or may even exceed, the climate change policy goals being set by national governments. Moreover, the article concludes that the companies targets are plausible and have a reasonably high likelihood of being delivered if energy prices remain high and if the companies can sustain recent rates of improvement. However, the article also cautions against relying on these types of voluntary commitments, noting that their scope is limited (i.e. most targets relate to companies' direct rather than indirect emissions), and that the inconsistencies and opacities in company reporting on performance and outcomes make it extremely difficult for stakeholders to have confidence that the targets set have actually been delivered.