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How to read a sustainability report: climate strategy (part 4/n)

Matan Rudis
8 min readJan 28, 2024


Climate strategy is the shiniest part of the sustainability report, full of promises, projects, initiatives, goals, KPIs and anything else that makes you feel that they got the planet’s back. Reading it before visiting the metrics part and the risk part could be misleading, but now that we’re equipped to navigate them, let’s learn how companies intend to mitigate their impact on climate change and adapt to the new atmospheric order.

Climate strategies come in so many forms and shapes, that we can’t capture them all, so instead, this post will discuss the critical indications and red flags to look out for. We’ll do it using several reports, here are the links:

Goal setting

Strategy is built of two components: goals and how we will achieve them. We all know that in order to meet your goals, you first have to set them and make them SMART — specific, measurable, achievable, relevant and timely. I’m adding to this, if you’re a company big enough to issue a sustainability disclosure, you have to make those goals public and transparent. Therefore, the first thing we’ll look for is where those goals are and how difficult it is to get a precise picture of the company’s efforts to become “more sustainable”.

H&M uses the term “approach” to describe its strategy, and dedicates 3 pages out of 152 to explain the approach. But if you really want to learn about the strategy, you should follow the link to a “sustainability disclosure”:

H&M, 2022

H&M’s intentions may be pure, but usually people don’t read all the 152 pages, neither do they click on the links to side reports. Making it complicated to analyze the strategy is a light form of green-hushing, in my opinion. They do everything right, they just don’t want to motivate you to know it. We’ll get back to the content itself soon.

If you’re reading Kraft’s report, you can simply flip to page 15 and read the strategy:

Kraft, 2023

The word “strategy” appears 125 times in ADNOC’s report, but there isn’t a single chapter carrying this title. I found the most relevant part to be “Our Strategic Pillars” which, for some reason, isn’t mentioned in the master table of contents.

ADNOC, 2022

By this point I hope you’re already convinced that finding the distilled version of the company’s climate strategy in its reports isn’t as easy as it may sound! You can think for yourself what’s the reason… But let’s assume that we succeeded in finding the strategy, how should we look at the goals?

H&M, 2019, p.49

This is a very good example of setting metrics, not goals. Let’s look only at climate. Are the goals SMART?

  • Specific? — Yes. They are talking about Scope 1, 2 & some Scope 3 categories.
  • Measurable? — Yes. They want to reduce 56% of their emissions by 2030.
  • Achievable? — Perhaps. They reduced emissions this year by 8%, they might as well meet the 2030 goal, but we don’t know how difficult that would be.
  • Relevant — Yes. Reducing emissions is the relevant metric for climate.
  • Timely — Yes. It sets 2019 as a baseline and 2030 as a horizon, not too close to fail, not to far to let things loose.

Good job H&M! From here we have two tasks: to compare those goals to last year’s, and to see HOW they’re going to make it.

H&M, 2021

Looks perfect, right? Well wait a second… in 2021 they also mentioned “use 100 percent renewable electricity in own operations” by 2030, and achieved 95% of it in the same year. Perhaps that’s the reason this goal isn’t mentioned in 2022? That’s one possibility. The other is that H&M decided to include the renewable electricity goal within their Scope 2, because practically it’s the same. And what if the results in 2022 weren’t so great and they decided to withdraw from that goal? We should investigate that through the scientific notes and with external data sources, like this one that shows the carbon intensity of the Swedish electricity grid and the distribution of sources, reminding us that not all “clean” sources are also renewable…

Source: Electricity Maps

Now we can compare the goals — not the full strategy — to what Kraft published:

Kraft, 2023

There’s not even a hint of a number, the priorities aren’t clear, and the content itself is vague. Not a good example.

Now we can check what they’re doing and into what they’re investing to become greener, healthier and more sustainable.

Planning and plotting

Kraft shows us this year’s progress with an example of an initiative and a few more details about what’s planned ahead.

There are a few interesting stories between the lines:

  1. Upstream logistics — they’re in the center, although they contribute “only” 4 million tonnes of CO2e out of approximately 29 million. The initiatives include improving the logistic fleet and shortening the distance from the source of the goods to the factory. This is an easy win for Kraft, it’s something you can solve with better planning and probably also save a few $. I’m not very excited about this one.
  2. Methane — which is what the cows fart before Kraft turns them into sausages. The way to deal with those gasses which are even more destructive than carbon dioxide in the short term, is through methane inhibitors and anabolic digesters. They’re not planning to scale down their livestock operations or transition to alternative, cleaner proteins. This should trigger a question for folks in the alt-pro space.
  3. Internalizing the cost of carbon — perhaps the most important thing a company can do, and Kraft says they did it in 2022. That means that the company now has a metric of $ per kgCO2e. Those financial stakes will find their way to the general financial planning, and from there they will be spent on new technologies, improvements or carbon removals, which leads us to…
  4. Carbon removals — are on Kraft’s roadmap for 2023! That’s good news for CDR developers and for the carbon markets, and somewhat of a signal about Kraft’s strategy: they’re not stopping to produce meat, but they will compensate for it somewhere somehow.

In 2024’s report we should see a drop in upstream transportation emissions, and a significant investment in carbon credits. We’ll wait and see.

Kraft addressed separately the issue of renewable energy. We already know that’s contained in Scope 2 emissions. But it is still important, as big corporates like Kraft provide a benchmark to other companies for the level of ambition and effort.

Last note about Kraft’s strategy. Earlier I sort of laughed at Kraft’s poor goal setting. But there’s one thing they do very well, and that’s to be relevant. The areas of impact they discuss are waste (during production and of food), packaging, water stewardship and circularity. Those topics are very relevant for the food industry. If they weren’t there, or if they were hidden behind less relevant, more shiny stories — that would cause concern.

Back to Sweden to our fast-fashion friends, H&M.

The main problem H&M has to solve is the emissions and waste that come along with fast fashion. That means that unless they scale down their business and change into a model that doesn’t assume a T-shirt should be discarded after 3 washes, then they have to find cleaner materials and produce more efficiently.

That’s exactly why H&M’s report sparkles innovation. New fabrics, new technologies and even investments in startups, like Fairbrics that utilizes captured CO2 in the production of polyester.


Another pillar in their strategy is to take part in partnerships and coalitions — in their site you’ll find over 100 of those. It may look like H&M does all the right things, they sign all the petitions, they take all the responsibility! But actually, when you’re as big as H&M, you usually take all the air in any room you walk into, so I won’t be surprised if they set the goals for those partnerships in a way that is convenient for them, instead of adhering to the requirements and expectations set by others.

While H&M’s report is very interesting and name-drops many initiatives, pacts, alliances, partnerships and what not, I try to remind myself that the main business of businesses is money. And so, how does H&M use its own money and position in the market to mobilize action towards its goals?

This is one of the most important pieces in the report, but it’s not highlighted. EUR 500 million is a lot of money. “Sustainability-linked bonds” doesn’t mean that the use of the money is for sustainability, but that the terms and interests are attached to sustainability performance indicators. It’s a mechanism that rewards progress towards sustainability. If we really want to understand the full story, we must dig deeper into the papers of those bonds and their reports, and see what financial derivatives were invested back into improved materials, technology for circularity, and other emission-reducing solutions.

With the right background music, those “future focus” points may sound really promising, and I even think H&M means it. However looking at each point here:

  1. It’s not us, it’s our suppliers
  2. Circularity means that we can produce endlessly, keep growing, and then recycle
  3. Supply chain once again, they should use cleaner energy and measure better
  4. It’s not us, it’s policymakers

If I were Naomi Klein, I would explain how this approach shows how much power and impact corporates have, and how little responsibility and ownership. H&M’s strategy is to remain the player between the textile factory somewhere in the global south, and the landfill somewhere in the global south. No reconsideration of growth and exploitation. So the conclusion I get to after reading their strategy is that we should pray for better technologies and deeper internalization of the cost of carbon, to see a real change.

That’s quite a lot to say about climate strategy from a report, isn’t it? And we still haven’t gotten to ADNOC — you’re welcome to open their report and try to find the strategy. You’ll probably need a strong microscope to find good news in it…

Quick recap: we’ve covered the metadata of an ESG report; GHG inventories and carbon emissions; climate risk; and now strategy. Next stop: nature and biodiversity!



Matan Rudis

Climate action, minus the hot air. Climate strategy & more at | Kayaks | Israeli in New York | Twitter: @MatanRudis