Companies made big climate pledges. Now they are balking on delivering.

They sent a pointed letter to AIG in June, charging that its continued investment in projects such as a Canadian pipeline that will ship some of the world’s most heavily polluting oil to British Columbia and a huge liquefied natural gas terminal in Australia belie AIG’s promise to reorient its business toward the targets in the 2015 Paris climate agreement. That agreement aims to limit global warming to 1.5 degrees Celsius above preindustrial levels.

“We have seen little evidence so far that the insurance industry is taking meaningful action to align its investment and underwriting decisions with the Paris Agreement,” Sen. Sheldon Whitehouse (D-R.I.), chairman of the Senate Budget Committee, wrote in an email to The Washington Post.

AIG, which declined to comment or share its response to questions about its climate pledge from the committee, is hardly unusual. Over the last year, Amazon retreated from an effort to zero out the emissions of half its shipments by 2030. Shell Oil dropped an ambitious initiative to build a pipeline of carbon credits through investment in forest preservation and other carbon-absorbing projects worldwide. And BP significantly scaled back its plan to reduce emissions by as much as 35 percent by the end of the decade.

As the planet heats up at an alarming pace, these turnabouts expose the shortcomings of leaving it up to voluntary corporate action to solve an existential crisis, said John Lang, the project lead at Net Zero Tracker, a group that monitors progress on corporate and government climate pledges.

“There is a massive credibility gap with these corporate targets,” he said. “We need more regulation. Otherwise, the dial just will not turn.”

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The United States gives generous subsidies to companies that pursue clean technologies but has no national climate law with emissions targets that industries must meet. It does not tax carbon, which many economists say is the most efficient and practical way to nudge businesses toward cutting their carbon footprint. And U.S. financial regulators — amid corporate pushback — have been unable to agree on rules that would simply require companies to report the emissions created by their operations and supply chains.

That leaves companies setting climate targets on their own terms. Experts say many of them announced that they would align with the Paris agreement without a clear plan for getting there or a full understanding of the trade-offs involved.

Lang’s group examined more than 1,000 companies that have pledges to zero out their emissions by 2050. It found that 38 of them — less than 4 percent — are doing the bare minimum required under the Paris agreement’s goal of limiting warming to 1.5 degrees Celsius. The rest are not meeting the “starting line criteria” laid out by the United Nations, which calls on companies to track their carbon footprint across supply chains, immediately cut emissions, create a scientifically credible plan for using carbon offsets, and report annual progress on meeting climate targets.

The lack of action by companies that have made climate pledges is particularly consequential because scientists warn that there is no time for delay, with a global emergency that demands emissions be cut now rather than in a decade or two down the road.

The United Nations warns in its newly published “Emissions Gap Report” that it will be impossible to meet the Paris goals unless global emissions are cut by about 40 percent of 2015 levels by the end of the decade. Industries are not meeting the moment, with the planet on track to reach 2030 with even higher emissions than 2015, according to the report.

The sobering findings set the table for challenging conversations as this year’s U.N. Climate Change Conference, known as COP28, underway in Dubai. It was only a couple of years ago, when the conference was held in Glasgow, that world leaders pronounced that the markets could take the lead in repairing the planet, with some of the biggest investment, banking and insurance companies enlisting in voluntary initiatives to combat warming.

Those initiatives are struggling amid shareholder resistance and political backlash from conservatives in the United States, with some red-state attorneys general sending threatening letters to companies involved. Nearly half of the companies that joined the U.N.- backed Net Zero Insurance Alliance have quit the program, including five of the eight insurance companies that were founding members.

Several companies pulled out of the alliance to avoid being targets of lawsuits and political attacks, while still moving forward with their own plans to stop underwriting fossil fuel projects, according to insurance company executives who spoke on the condition of anonymity to talk candidly about private deliberations. But they said the fracturing of the alliance as well as the lack of climate-focused regulation in countries like the United States are inhibiting action in an industry that has outsize influence over the energy transition, as fossil fuel developers can’t function without insurance.

“Let’s not lie to ourselves,” one insurance executive said. “You can’t make the same progress working on your own.”

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The exodus of insurers followed another major blow to the U.N. initiatives, when the mutual fund colossus Vanguard last December pulled out of a consortium of major investment companies vowing to wean their portfolios off fossil fuels. The company said at the time that it wanted “to make clear that Vanguard speaks independently on matters of importance to our investors.”

Leaders of the initiative acknowledge that there have been setbacks and that companies are not backing their climate pledges with tangible action quickly enough, but they say things are trending in the right direction. Curtis Ravenel, a senior adviser to the Glasgow Financial Alliance for Net Zero, said there are 650 companies enlisted in the group’s initiatives, up from fewer than 100 following the 2021 U.N. climate conference in Scotland.

“This is like trying to shift a tanker,” he said. “It involves about 40 percent of the world’s private finance. Realigning it is not going to happen overnight. It will take some time.”

The challenge is that time is one thing climate scientists say the planet does not have. While companies are making climate pledges at an encouraging pace — with Net Zero Tracker finding that half of the world’s 2,000 largest public companies have set targets to zero out their emissions — few are following through on those goals with adequate action to halt catastrophic warming.

“We’ve ended up in a situation where a lot of companies made these commitments because it was good public relations, but they didn’t have a viable plan,” said Tariq Fancy, a former chief investment officer for sustainable investing at BlackRock, another large financial firm that has dialed back its climate resolve.

Even the most committed firms are struggling in the absence of government policy that would set clear benchmarks for corporations and penalize them for falling short. PepsiCo, which is aiming to set an example for the food industry by cutting emissions across its supply chain by 40 percent from 2015 levels by the end of the decade, acknowledges in a recent impact report that it is far from on track. Its 2022 carbon footprint reflected no cut at all; in fact, the company sent more greenhouse gas into the atmosphere last year than it did in 2015.

PepsiCo said in its report that while it has taken a number of meaningful steps, such as shifting to zero emissions delivery trucks and powering factories with clean energy, “delivering our products requires certain key inputs and activities whose emissions we cannot always control or even influence.”

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Amazon framed its abandonment of what was called Shipment Zero as part of a realignment toward an even more ambitious “Climate Pledge” to zero out emissions companywide by 2040. But the pledge does not include Shipment Zero’s more immediate goal of zeroing out emissions on half of its shipments by 2030. The company is taking other action in the short term, such as putting 100,000 electric delivery vehicles on the road.

(Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)

The corporate backsliding that is most concerning to climate leaders is playing out in the fossil fuel industry, as companies double down on oil and gas production after recent windfall profits. The biggest companies in the sector speak often of their commitment to the energy transition — and forged an agreement at COP28 to significantly curtail their potent methane emissions — but the International Energy Agency warns in a new report that the industry is failing to adapt. The agency found that the industry needs to cut the emissions associated with oil and gas production by 60 percent by 2030 to meet the targets in the Paris agreement, and that it has no plan for getting there. The IEA also found that oil and gas companies should be investing half their capital expenditures in clean energy projects by 2030. They currently allocate just 2.5 percent.

ExxonMobil is highlighted by the nonprofit InfluenceMap as mentioning its net-zero goals 815 times on company websites and corporate materials while lobbying for policies, such as drilling expansions in the United States and looser rules for power plant emissions, that contradict that goal. The company declined a request for comment.

The group found that Chevron mentioned its net-zero goals 138 times online while lobbying to weaken the tailpipe emissions standards that are a linchpin to cutting the carbon footprint of cars and trucks. Chevron spokesman Bill Turenne said in an email that the company supports the Paris agreement goals and that many pathways to meet them factor in continued use of oil and gas. “Halting production of the energy the world relies on today before we have viable and scalable alternatives for tomorrow would have grave and unintended consequences,” he wrote.

Executives at BP and Shell make similar arguments, while highlighting the investments the companies continue to make in clean energy and lowering the carbon intensity of the products they sell. Shell said in a statement that it is on a path toward net-zero emissions in 2050 and will invest up to $15 billion in clean energy between 2023 and 2025. BP said “low carbon energy” investments soared to 30 percent of the company’s capital expenditures in 2022.

But the widening gap in the oil and gas industry, as well as most other industries, between the work needed to keep warming to 1.5 degrees Celsius and what companies are actually doing reveals the limitations of a system in which climate action is voluntary.

“The question is whether this is a market failure, or a failure of government to come in and play the role it should,” said Doug Chia, a fellow at the Center for Corporate Law and Governance at Rutgers Law School in New Jersey. “What is most notable here is the lack of government action.”