The CO₂ Bubble

For our study, we sampled the 500 largest corporations listed on the New York Stock Exchange — a.k.a. the S&P 500. The operation of these 500 companies accounts for over 2.1 billion tonnes of CO2 emissions per year, which is roughly 32% of all US greenhouse gas emissions. The entire Amazon Rainforest absorbs 2.2 billion tonnes of CO2 per year.

An important caveat: This doesn’t include emissions passed onto consumers (i.e., If you buy gas from a Chevron gas station, your car’s emissions don’t count toward Chevron’s CO2 emissions here). Instead, we are focusing on emissions from operations, like extracting and transporting petroleum, which in Chevron’s case represents just 15.15% of total direct and indirect emissions.

No S&P company is carbon-zero yet, but a few are close in operating emissions. Conversely, just 18 companies account for half of the 2.1 billion tonnes of operating CO2 that the S&P generates.

No surprise: The biggest greenhouse gas emitters are fossil fuel, transport, petrochemical, and utility companies.

That’s the present situation. But we can also look into the future and see whether these companies are committed to changing course to address climate change.

For starters, if companies are serious about confronting climate change, they should have an emissions policy in place. These policies are published in annual ESG statements and include a non-binding pledge to confront climate change by reducing emissions. 354 S&P companies have emissions policies.

That’s an important step, but not all climate goals are equally bold and emissions policies are non-binding. An emissions policy doesn’t hold you accountable to specific actions—unless it includes reduction targets.

245 S&P companies with emissions policies have committed to specific reduction targets.

The Paris Agreement compels countries to reduce greenhouse gas emissions by self-determined targets aimed at averting a catastrophic 1.5 degree celsius rise in global temperature

Before the United States withdrew from the Paris Agreement in 2017, the country set a target of 17% reduction by 2020 and 80% reduction by 2050 (relative to 2005).

The European Union set even more aggressive targets: a 40% reduction by 2020, and a 85% reduction by 2050 (relative to 2005). The EU targets align more closely with what scientific consensus urges as obligatory to curb runaway rising temperatures.

Just 85 S&P companies are currently on track with the US’s Paris Agreement pledge.

And only 44 S&P companies are currently on track with the EU’s Paris Agreement pledge.

Incredibly, those 44 companies hitting the EU’s high threshold account for 28% of the S&P’s carbon emissions. This includes many major utility companies, whose emission reductions will have a much bigger impact.