Net zero pledges: not even next management's problem

Highly-polluting business in industries such as oil and aviation have generally adopted the 'easy' target of net zero by 2050. Photo / 123RF

Lex OPINION:

The chief executive of a large financial institution made a striking comment in private conversation this week. He said it was easy for bosses to commit their companies to net zero carbon emissions because it was "next, next, next, next management's problem".

He was riffing on the phrase "next management's problem" with which chief executives habitually — albeit quietly — dismiss issues they do not expect they will have to deal with during their incumbencies.

Emissions pledges often have agreeably long deadlines. The tenures of bosses have been shortening. The revolving doors of most C-suites will have spun several times before chief executives of multinationals are expected to keep promises made by predecessors.

Tesco, for example, said on Friday it was extending a target of net zero emissions across its operations by 2035 to encompass its entire product range and supply chain by 2050. The last boss of the UK supermarket chain, Dave Lewis, was in post for six years.

Lex research shows that highly-polluting business in industries such as oil, aviation and cement have generally adopted the "easy" target of net zero by 2050 preferred by many politicians. Businesses with relatively low carbon footprints are bolder in setting nearer-term targets.

Our chart also shows how many CEOs might be in post before a company's net zero target is reached, based on how long their stints have typically been in the past. In other words: how many CEOs it might take to change a company's lightbulbs for carbon neutral lamps running on renewable electricity.

We calculate that at most businesses at least four chief executives may hold that title before the selected net zero target — in line with the prediction of our contact. Cement maker LafargeHolcim could go through more than 10 CEOs, though current boss Jan Jenisch has already served twice the short two-year term of his predecessor. Airline Cathay Pacific has also had high CEO turnover.

At AstraZeneca, achieving an ambitious net zero target of 2025 is more likely to be "next management's problem". Chief executive Pascal Soriot, 62, has been in situ for nine years.

Facebook ambitiously hopes to hit net zero by 2030. Founder Mark Zuckerberg, 37, has already been CEO for longer than the years that will elapse before then. The entrepreneur may thus have the unusual distinction of being held personally accountable for whether his company hits a net zero target he himself set.

- Lex is a premium daily commentary service from the Financial Times.

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