Twenty years of ESG reporting, and emissions still soared

Twenty years of ESG reporting, and emissions still soared

Reports show clear evidence, actions unchanged

In Don’t Look Up, the data is undeniable. The reports provide clear evidence the comet will destroy Earth. But nobody takes action to change course. ESG reporting has spent twenty years perfecting that genre.

Companies have reported ESG improvements for two decades. Meanwhile global fossil emissions hit roughly 42 billion tonnes in 2025. Furthermore, they rose about 1%, despite record renewables growth.

Both statements are true. So, sit with that for a moment. Ultimately, that gap is the most important fact in ESG today.

NOAA global carbon dioxide trend
The evidence is clear, CO2 keeps rising, meanwhile we look on. Sources: Adobe Stock for the comet, NOAA Research for trends in carbon dioxide.

How both can be true

  • ESG Reporting is not reducing emissions. The disclosure industry rewards a good report, not fewer tonnes. Therefore, your report can improve every year while your footprint grows.
  • Intensity beats absolute, in print. Emissions per dollar of revenue can fall forever while total tonnes rise. You only need to grow. Moreover, most reported ‘improvements’ are intensity metrics.
  • Boundaries do the heavy lifting. Scope 3 usually carries most of a company’s footprint, as Blog 10 on where the supply chain impact sits explains. Meanwhile that is where the exclusions, estimates and footnotes live.
  • Offsets substituted for reductions. Cheap credits of doubtful value let companies report progress. Nevertheless, nothing physical changed in their operations or supply chains.
  • The system optimised for the audit. Twenty years of frameworks taught firms to pass audits. However, passing audits was never the goal.
Reported ESG improvement against absolute emissions
Figure 1: Reported improvement against absolute emissions, 2005 to 2025. Source: Global Carbon Project. © SPV 2026.

This is not a counsel of despair

The same two decades produced firms that made real cuts. Furthermore, they share a clear pattern.

  • First, they treated emissions as an operations problem, not a reporting problem. They understood and addressed a sustainable value chain.
  • Next, they engaged the suppliers who hold the 80%.
  • Then they contracted for cuts, funded them where needed, and counted tonnes rather than paperwork.
  • Further, they moved to renewable energy. No other reported actions moved the dial.*

So, the lesson is not that ESG failed. Instead, the reporting first version failed, just as its incentives predicted.

The test I would apply

So, one question separates the two kinds of company.

Can you name the projects that removed tonnes from your footprint last year, and the supplier decisions behind them?

If the answer is a document, you have a reporting program and an understanding of your sustainable value chain. However, if the answer is a list of physical changes, with renewable energy excepted, you have a reduction program.

Ultimately only one of them survives the scrutiny now coming. Meanwhile regulators are tightening greenwash enforcement. Furthermore, anyone who reads Blog 12 on the 1.5°C target will apply the same test.

SPV moves your sustainability effort from reporting to real supplier level cuts, without the greenwash. Does that gap feel familiar? Book a virtual coffee: pdigweed@spvalue.com.au.

This is The Hollywood Procurement Blogs S1 E11. Material created by Paul Digweed with support by AI team member.

References

Paul Digweed