P&G and Colgate called out as high emitters despite bold net zero pledges

Consumer goods giants Colgate-Palmolive and Procter & Gamble (P&G) are on a net zero pathway to 2030 with expected emissions seven times higher than recommended levels set by the Science-Based Targets initiative (SBTi), according to  new research shared with Net Zero Investor today.

The analysis of consumer good corporates by NGO Planet Tracker found Unilever’s transition plan to be the most credible, with its consideration of Scope 3 emissions and the link between management remuneration and sustainability. 

At its 2021 AGM, Unilever’s Climate Transition Action Plan received 99.59% shareholder support.

Carbon pricing mechanisms, however, could cost Unilever up to 14% of its annual operating income, according to the data.

Over at P&G, during the company’s 2020 AGM, 67% of voting shareholders urged the company to increase the scale, pace, and rigour with which it addresses environmental and social harms linked to its sourcing of pulp and palm oil.

However, there has since been criticism of the firm for still not being active enough in its environmental activity following the resolution. 

Earlier this year, activist investor Tulipshare accused the U.S. company of continuing to be “misleading” in its climate commitments, alleging continuing issues such as sourcing pulp from primary forests.

Planet Tracker also calculated the magnitude of the companies’ emissions when incorporating indirect Scope 3 emissions. 

The findings showed that emissions for Unilever, Colgate-Palmolive and P&G are up to three, five and eight times higher, respectively, when optional indirect emissions are accounted for.

Ion Visinovschi, a research analyst at Planet Tracker, said the research "demonstrates a worrying trend of companies failing to effectively tackle direct Scope 3 emissions, especially upstream, which if not mitigated soon could cost billions of dollars in the future.”

Earlier this year, an investigation by Planet Tracker found that PepsiCo could be exposed to $4.4 billion of climate related risk per year by the end of the decade if it stays on its current emissions trajectory.

Responding to the most recent Planet Tracker report, a spokesperson for P&G said: "P&G has set an ambition to be net zero by 2040 as shared in our Climate Transition Action Plan, and we are continuing to make progress toward our 2030 Climate targets. P&G changed our reporting scope during the timeframe Planet Tracker used for their model, making it inaccurate. P&G continues to be committed to our climate goals while also working on broader solutions that can also help move the industry forward."

A spokesperson for Unilever said: "Unilever welcomes Planet Tracker’s report. We committed to updating our Climate Transition Action Plan every three years and are currently working towards an update in time for our Annual General Meeting next year. With this context, the report is timely and helpful for us as we look to continually improve our Climate Transition Action Plan."

A statement from Colgate-Palmolive sent to Net Zero Investor read: "Colgate-Palmolive’s ambitious target to be net zero by 2040 has been approved by the Science-based Target Initiative (SBTi), the leading authority on corporate climate goals." 

The company went on to say that: "We are the only large multinational CPG with an approved SBTi target aligned with a 1.5 degree C pathway." 

It said the "the Planet Tracker report contains significant inaccuracies, including inconsistent use of SBTi boundaries, base years and scopes."