General Electric (GE) has joined the ranks of major companies committing to be responsible for net-zero emissions of greenhouse gases (GHG) by 2050, including not just its own operations but also Scope 3 emissions from the use of products it sells.
The announcement in the company’s recent sustainability report comes a few months after an overwhelming percentage of GE shareholders – with the backing of the company’s board – voted to approve a proposal seeking a report on its efforts to achieve net-zero GHG emissions.
‘We are particularly aware of the engineering challenges still to be solved to make the ambition of net-zero a reality, and that developing solutions will require collaboration with our customers, policymakers and other companies. [But] we believe those challenges are also key strategic opportunities for GE,’ Lawrence Culp, GE’s chief executive and board chair, writes in the new report. ‘These pages show the investments we are making in both our current products and breakthrough technologies.
‘We also recognize the importance of measurement and target-setting to drive progress in reducing emissions over a shorter time horizon. We plan to continue developing and to communicate details about more specific, nearer-term GE [GHG] reduction metrics and targets that include Scope 3 emissions.’
As You Sow welcomed the announcement, stating that it ‘importantly includes its Scope 3 emissions from customers’ use of the products it sells, including power generation equipment, which account for a significant portion of the company’s emissions.’
Danielle Fugere, president of As You Sow, says in a statement: ‘Investors support this commitment by [GE] to take responsibility for the climate impact from use of its products and to transition to a more sustainable business model.
‘GE’s leadership demonstrates that industries involved with the burning of fossil fuels have the capability to evolve their business strategy and reduce their greenhouse gas emissions in line with the [Intergovernmental Panel on Climate Change’s] global goal for avoiding catastrophic climate change. GE shareholders look forward to seeing further detail on the company’s transition plan and the timeframes for action.’
As You Sow, which submitted the net-zero proposal on behalf of Amalgamated Bank, said in a supporting statement that a key indicator of a company’s alignment with the Paris climate change agreement is indicator 1, which seeks disclosure on whether the company has set an ambition to reach net-zero GHG emissions by 2050 or sooner and whether any such emissions ambition statement explicitly includes Scope 1, 2 and, when applicable, the most relevant Scope 3 emissions. This is known as the net-zero indicator.
The proposal requested that GE’s board issue a report ‘evaluating and disclosing if and how the company has met the criteria of the net-zero indicator, or whether it intends to revise its policies to be fully responsive to such indicator.’
GE’s board recommended that shareholders vote for the proposal. The board stated in the company’s proxy statement that GE has taken steps such as announcing the new goal of achieving carbon-neutrality for its own operations – Scope 1 and 2 emissions – by 2030. But it adds that Scope 3 is a more expansive category of other indirect emissions associated with a company’s operations.
According to As You Sow, the Climate Action 100+ (CA100+) investor initiative that represents investors with more than $54 tn in assets under management had flagged the resolution as a key proposal. CA100+ earlier this year released its first benchmark assessing the ambitions and actions of the world’s largest GHG emitters and other companies it says can help propel efforts to reach the net-zero emissions target.
CA100+ says its net-zero company benchmark provides what it calls the first detailed, comparative evaluations of specific companies’ performance against the initiative’s three high-level commitment goals: reducing GHG emissions, improving governance and strengthening climate-related financial disclosures.