Corporate Carbon Reduction Pledges: An Effective Tool to Mitigate Climate Change?

In this article we first summarize the specific plans articulated by seven major corporations for reducing their Corporate Carbon Footprints (abbreviated as CCF from hereon). Our sample is not intended to be representative of the broader population of firms that have become active in this regard. Instead, our selection aims to cover a range of industries, including energy companies, manufacturers, and distributors of consumer products as well as internet technology firms. We then compare and discuss key features of the decarbonization plans put forth by these seven firms to highlight substantial differences regarding the specificity and measurement of the articulated goals. Our discussion points to considerable variation in the use of so-called carbon offsets. We also discuss what might make CCF disclosures more transparent and credible in the future, including the possibility of such disclosures becoming mandatory rather than voluntary.