Creative accounting practices for procuring energy and an overreliance on carbon credits are masking the real status of corporate progress at the midpoint of a critical decade for climate action, according to Carbon Market Watch and NewClimate Institute, which studied the net zero commitments of 20 global brands in their report Corporate Climate Responsibility Monitor (CCRM) 2025.
CCRM scored companies by assessing how well they track and disclose emissions, set carbon reduction targets, adhere to sectoral transition targets, and are working to tackle ongoing emissions and scale up durable carbon emission removals.
Last year’s version of the report found that major corporations were on track to cut their emissions by 30 per cent below 2019 levels – well below the levels needed to achieve the goals of the Paris Agreement. However, the report’s authors said they were unable to update the figure this year because of confusing and misleading accounting practices, poor disclosures, and the overuse of questionable solutions such as biomass to lower emissions.
Regulators need to create an environment in which corporate climate action is a business necessity rather than a voluntary side job.
Corporate Climate Responsibility Monitor
The top performing companies this year were all headquartered in the European Union (EU), where large companies are required to disclose their environmental and social impacts, as well as how their sustainability actions affect their business, in alignment with the Corporate Sustainability Reporting Directive (CSRD). CSRD took effect last year.
However, the assessment did not rate a single company’s climate programmes as having a “high” or even “reasonable” level of integrity. The best performing firms – which included European fashion firms H&M and Inditex, and automaker Stellantis – achieved only a “moderate” integrity rating.
Meanwhile, the climate pledges of Chinese fast fashion brand Shein and Japanese carmaker Toyota were deemed to have “very low” integrity.
No company’s climate programmes were rated to have a high or even reasonable level of integrity in this year’s edition of the report. Source: Corporate Climate Responsibility Monitor 2025
Where are corporate climate commitments falling short?
Across the 20 companies assessed, few were found to have implemented measures to drive down emissions at the scale or speed required to meet 2030 climate goals, or lack transparency in reporting progress. Notable exceptions are H&M’s efforts to increase the use of renewable electricity in its supply chain and Mars’ attempts to weed deforestation out of its supply chain.
Corporate climate commitments; the good, the bad and the ugly
The Corporate Climate Responsibility Monitor identified some of the best and worst climate practices deployed by companies in the tech, agrifood, automotive and fashion sectors:
The good:
• Adidas, Inditex and H&M Group for the first time disclosed data on the volume or weight of material used for both textile products and packaging – critical data for assessing the fashion firms’ progress on circularity.
• Google and Microsoft are signatories of the 24/7 Carbon-free Energy Compact, which supports a shift to a more granular approach to renewable electricity accounting.
• Danone set a 2030 methane emissions reduction target for its milk production and plans to increase its share of plant-based protein. The firm has not set a target for plant-based protein. Only Danone has a credible and ambitious food loss and waste target.
• Inditex explicitly disclosed whether it uses carbon dioxide removals or carbon credits, leaving less room for mis-interpretation.
• H&M is the only fashion brand to publish detailed information on supply chain energy use.
The bad:
• None of Toyota’s decarbonisation targets are 1.5°C-aligned and it has no commitment to phase out internal combustion engines. The carmaker’s emissions jumped by 33 per cent between 2021 and 2023.
• Shein’s 2030 targets allow the ultra fast fashion brand to more than double its emissions compared to 2021. Shein’s emissions more than tripled between 2021 and 2024, and the company’s 2030 targets are not Paris-aligned.
The ugly:
• JBS rates the lowest of any company in the study. It has committed to cut emissions intensity by only 30 per cent by 2030, but doesn’t disclose whether it will use land-based carbon removals.
At the sector level, the report noted that tech firms are relying on outdated market-based accounting for their Scope 2 emission calculations, which are the emissions from electricity usage. The market-based accounting approach allows firms to claim a reduction in emissions from activities such as buying renewable energy certificates (RECs), even when their actual, location-based emissions may not have dropped at all. All of the tech firms in the study – Amazon, Apple, Google, Meta and Microsoft use the market-based accounting approach. These companies have all seen electricity consumption soar due to increasing artificial intelligence use.
For fashion companies, notably H&M, while commitments have been made to phase out coal, a reliance on fossil gas and biomass persists. Also, commitments to move away from the high-volume fast fashion business model, reduce overproduction and embrace circularity are lacking and fragmented, the report found. Shein’s 2030 climate target, which were approved by standard-setter Science Based Targets initiative (SBTi) last month, allows the company to more than double its emissions from 2021 levels by the end of the decade.
Climate commitments in the agrifood sector were undermined by a poorly defined use of carbon credits, which distracted from the need for deep, structural commitments to cut emissions, particularly of the potent greenhouse gas methane. The report noted that standard setters should oblige agrifood companies to set separate targets for carbon removal and reduction to bring greater transparency to the sector. None of the agrifood companies in the report had clear commitments to transition from animal to plant-based protein. Most agrifood firms, except for Brazilian meat giant JBS, have committed to sourcing only deforestation-free commodities by 2025, although concerns linger around traceability.
In the automotive sector, long-term decarbonisation pledges were rated as critically insufficient due to the absence of specific commitments to reduce emissions. All of the brands assessed except for Stellantis – which has committed to cut absolute emissions by 30 per cent by 2030 – have made insufficient progress to phase out internal combustion engines, while existing decarbonisation commitments are vague and do not align with the Paris Agreement’s 1.5°C target, the report said. Progress in increasing the share of electric vehicles (EV) sales has been mixed, and measures to improve battery production and EV efficiency have mostly been neglected.
Shifting goal posts
The goal posts of what constitutes best practice in climate action has shifted with growing scientific evidence that underpins the climate crisis, the report said. While there have been some improvements in corporate climate action – for instance, there are increasingly more complete and nuanced emissions disclosure and sustainability reports that are aligned with corporate financial reporting standards – CCRM is calling for regulators to step in to bring greater accountability to climate targets.
Benja fetchs, and expert on global carbon markets at Carbon Market Watch, said that a strong regulatory framework would ensure that the private sector takes real climate action without engaging in greenwashing, and that corporate accountability frameworks validate and verify corporate climate plans against clear government requirements. These initiatives would help civil society more effectively hold large companies to account.
Faecks and her colleagues also recommend that target-setting frameworks, such as SBTi and the ISO Standard for Net Zero Aligned Organisations, require companies to set transition-specific targets, such as food firms shifting to plant-base food or automakers producing more EVs.
It also called on sustainability frameworks to prioritise 24/7 matching of renewable electricity procurement – a commitment to ensure that every kilowatt-hour of electricity consumed is matched with carbon-free electricity at every hour of every day. This is aimed at tackling the limitations of the market-based accounting approach to buying power, and for frameworks to push firms to set specific targets for renewable electricity in their supply chains.
“Governments must put in place a binding legislative and regulatory framework that sets the direction for individual sectors and the economy as a whole,” Faecks said. “Voluntary standards need to complement these efforts by focusing more on enforcement and measurable impact.”
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