Big Corporations and Climate Change: What’s the Link?

There’s a frequently cited claim that only 90 companies are responsible to blame for most of the global carbon emissions.

It’s a powerful claim that shifts blame from consumers to big business. But is it true?

Let’s find out.

Are big corporations mostly responsible for climate change?

In reality, many of the world’s largest companies are huge polluters and are responsible for a significant amount of the world’s carbon emissions, but the truth (as it often is with climate science) is a little more complicated than a simple yes or no.

There are several reasons why large corporations have large carbon footprints, including the materials and the product methods they use, as well as less obvious factors such as transport.

When it comes to measuring carbon impact, there are direct carbon emissions (the emissions you produce by farming, for example) and indirect carbon emissions (the emissions produced by a consumer disposing of your product, for example).

Emissions are split into Scope 1, Scope 2, and Scope 3 emissions.

The larger the corporation, the bigger the supply chain and the more consumers buying its products. Plus, many of the world’s largest companies use products such as plastic or fossil fuels, which are known for worsening climate change.

What are Scope 3 emissions?

Scope 3 emissions are indirect emissions caused by actions taken outside of the direct production of a product or after a product is created. Examples of these emissions include:

  • End-of-life treatment of products
  • Use of sold products
  • Transportation and distribution
  • Investments
  • Employee commuting

While Scope 3 emissions are indirect consequences of corporations’ actions, the accountability should still lie with the polluters. When companies fail to factor in Scope 2 and 3 commissions, they can significantly underestimate the amount of carbon they produce.

For any climate pledges plan to work successfully, corporations must first accurately understand their impact on global warming.

To put emissions into context, here’s how much CO2 you can expect to emit when you spend a pound with one of the following companies.

Name of Company
The amount of CO2ekg emitted for each GBP spent:

  • Walmart: 0.0287
  • Apple: 0.0634
  • Amazon: 0.255
  • The Coca-Cola Company: 0.25295
  • Disney: 0.0175
  • Toyota: 1.82
  • Nike: 0.246
  • IBM: 0.018
  • Quanta Services: 0.372
  • AMD: 0.746
  • PepsiCo: 0.0719
  • Principal Financial: 0.06
  • Autozone: 0.243
  • Supervalu: 1.168
  • FedEx: 0.229

Where does the data on big corporations come from?

The idea that 90 of the world’s largest companies are to blame for climate changes comes from geographer and ‘carbon accountant’ Richard Heede.

The results responsible for Richard’s theory come from a report which showed that almost two-thirds of the major industrial greenhouse gas emissions originated in just 90 companies globally.

These corporations either emitted the carbon themselves or supplier carbon which was then released by consumers and industry, which brings us back to direct and indirect emissions.

The companies named in the study included famous names like ExxonMobil, Chevron, BP, Shell, and Saudi Aramco. The report was featured in The Guardian and coined a new phrase for the big corporations that contribute to global warming; ‘Carbon Majors.’ Non-profit companies are now taking action to reduce the carbon dioxide emissions of these carbon majors.

Are consumers responsible for the climate crisis?

Consumers are in part responsible for climate change by showing a demand for these polluting products, therefore encouraging companies to keep increasing carbon emissions and providing no incentive for decarbonization or clean energy.

The more gas we buy from oil giants and red meat we buy from factory farms, the more we encourage companies to make.

However, some argue that infrastructure makes these choices for us. After all, if there’s little to no public transport in your area, you’ll need to drive a gas-guzzling car to your kid’s school and your workplace.

Infrastructure’s contribution to consumers’ climate choices supports the idea that consumer decisions are shaped by their environment. In less developed countries, the carbon emissions per capita are significantly less than in nations like the USA, as a result of having an infrastructure that requires fewer resources.

The data backs up this point of view. Studies have shown that 6 out of 10 consumers say they are willing to change spending habits to reduce environmental impact, while 1 in 3 shoppers have stopped buying certain products because of their environmental impact.

Plus, when people sought out sustainability information about a particular product, the data impacted their purchasing decision. Perhaps if consumers received a little more information about the products they were buying, they’d be more likely to opt for sustainable choices.

The lack of sustainable choices currently available, however, leads to a vicious cycle.

Big corporations claim there’s no demand for environmentally-friendly products, so they don’t make them. Consumers then can’t choose sustainable products, because there aren’t any available. The cycle repeats.

It’s also in big corporations favour to push the blame onto consumers. It was actually BP that popularised the term ‘carbon footprint’ in the early 2000s, when discussing how to get consumers to reduce their carbon production.

So, what can be done about carbon emissions?

It’s almost impossible to separate consumer activity from the actions of corporations when discussing carbon emissions, because the two are inextricably linked. Companies aren’t just producing emissions for no reason; they continue to create polluting products because we, as consumers, continue to buy them.

Big corporations, however, are responsible for lobbying against climate action that would force them to be more sustainable.

In reality, change has to come from both sides. Consumers should continue to buy more sustainable products to increase demand and competition, which drives prices down.

Lobbying and protesting are important too. Individual consumers can’t impact corporation’s profits enough to force them into action, so institutional change has the best chance of reducing the Scope 1, 2, & 3 emissions of these companies.

The more we lobby policymakers to change climate policy and invest in renewable energy, the more fossil fuel companies will be forced into making the changes needed to achieve net-zero.

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Reduce emissions with actionable insights on all your suppliers, embedded seamlessly into your procurement stack