Greenhouse Gas Emissions: The Evolution of Adverse Impact Practices Over Time

Data in Brief

Coverage Period: 2012 – 2025

Events Analysed: 60 Controversies

Sectors involved: 8

77%: Events in Oil & Gas, Power Utilities and Transportation

27%: Driven by failure to meet climate commitments

Data source: Inrate data on controversies assessment

Inrate systematically monitors and collects controversies, documented events in which a company’s operations, practices, or products cause adverse impacts on the environment, society, or governance standards. Each controversy is assessed and scored based on the severity of the harm, the breadth of those affected, and the degree of corporate responsibility involved.

This scoring methodology enables investors and analysts to move beyond companies’ CSR disclosures and incorporate a more granular view of real-world corporate conduct into their ESG ratings.

Controversies are assessed across a structured set of indicators – spanning environmental violations, labour and human rights abuses, governance failures, and supply chain risks.

In this blog, controversies over Greenhouse gas emissions are analysed. The blog provides a description of main causes of these events, sectors involved and events’ trends.

Among the many categories of Inrate tracks, Greenhouse gas emissions have emerged as one of the most impactful sources of corporate controversy. As global climate commitments have hardened, from the Paris Agreement through to national net-zero legislation, the gap between corporate pledges and measurable action has drawn increasing scrutiny from regulators, courts, and civil society alike.

Greenhouse Gas (GHG) emissions related controversies span a wide spectrum: from hard regulatory violations and excess pollution events to broken climate commitments and a growing wave of strategic climate litigation, also driven by activism campaigns.

The analysis draws on 60 controversy events recorded by Inrate between 2012 and 2025. Controversies have been analysed across all sectors: among them, only 8 sectors have reported controversies in this domain.

Although the number of controversial events over Greenhouse gas emissions is relatively low, averaging around four events per year, their significance goes beyond their frequency. Due to the potentially severe environmental impacts associated with adverse practices in this domain, and the actual impact of some of these events, we consider this topic highly relevant and worthy of further assessment.

Read more: Navigate ESG Risks with Inrate’s ESG Controversies Scores

Three Sectors Dominate the Controversy Landscape

Of 60 total controversy events recorded, more than two-thirds fall within just three sectors, revealing where materiality, regulatory and reputational pressure is most acute. Energy (Oil & Gas) dominates with 20 controversies (33%), within the dominant theme of high emissions and pollution; followed by the Transportation sector that shows 18 controversies over GHG emissions mostly over vehicles exceeding emissions with respect to manufacturers disclosures (30%), and Power utilities with 8 controversies (13%) spanning fines because of emissions exceeding the legal limits and activism against perpetuating pollution. Other sectors involved are Resources extraction across different causes, Nutrition, mainly because of failure to meet climate commitment, Financial services for heavily Financing Oil and Gas production, Disposal and recycling with controversial events over pollution, and Communication, over misreported emissions claims.

Figure 1 : Controversial events per sector and dominant root causes

Ten distinct drivers behind controversies over GHG emissions have been identified (Table 1). Among them, three topics are the most recurrent: failure to meet climate pledge, misrepresentation of emissions, and emissions pollution. Failure to meet climate pledge commitments, such as net-zero, carbon-neutrality and reduction targets revision, is the largest cause category (27%). Failure to meet climate commitments can be attributed to multiple factors, including overly optimistic transition scenarios, evolving shareholder expectations, and strategic misalignment.

An example is the case of BP. In 2020 BP set one of the sector’s most ambitious net-zero-by-2050 strategies, including an interim target to cut its Oil-and-Gas production by 40% by 2030 against a 2019 baseline¹. BP had to lower that target to 25% in 2023 ² and, in its February 2025 strategy reset, dropped the production-cut target altogether³ — refocusing on Oil and Gas. BP has genuinely cut its own 2025 operational (Scope 1 and 2) emissions — by 37% versus 2019⁴ — but the abandoned target on production, which drives the far larger downstream Scope 3 emissions, made an operational progress coexists with a retreat on the emissions due to the sold product.

Not only the failure to meet climate commitments, but also the misrepresentation of emissions, may expose companies to reputational, Financial, and legal risks. Indeed, the second most common root cause of controversial events in this domain is the misrepresentation of GHG emissions, accounting for 23% of cases.

This was the case of General Motors (GM), which agreed to pay $146 million following inaccurate reporting of its vehicles’ emissions⁵. In July 2024 the U.S. government found that around 5.9 million GM vehicles (model years 2012–2018) emitted on average more than 10% more CO₂ than the company had reported; GM agreed to a penalty of about USD 146 million and to forfeit some 50 million tonnes of Greenhouse-gas credits.

Excess emissions and pollution constitute the third most common cause of controversies related to GHG emissions, accounting for 20% of cases. This category is of particular concern due to its direct impact on the communities, the environment, and human health. An example is the case of Allied Waste. In January 2024, the U.S. Environmental Protection Agency (EPA) and the Department of Justice announced a settlement addressing allegations that the company failed to timely install a mandated gas collection and control system and submit required emission reports at its Pine Avenue landfill in New York. Under the agreement, Allied Waste agreed to pay a penalty of $671,000, implement monitoring practices, and operate a gas collection and control system aimed at mitigating an estimated 86,000 metric tons of CO₂-equivalent methane emissions annually⁶.

Those three causes represent alone around 70% of the overall topics leading to adverse business practices over GHG emissions.

Controversies over the most dominant themes are mostly concentrated in the Energy and Transportation sectors showing a higher risk for these two high impact sectors. Nevertheless, the picture is complex and includes activism against main emitters, and greenwashing scrutiny, regulatory rulings, and supply-chain-related emissions disputes. Those causes have risen significantly post-2021, probably due to increased public awareness and concerns on the topic.

Table 1 : Events over GHG emissions per cause category

From Isolated Incidents to a Structural Shift

The trajectory of the number and types of events shows that what began as sporadic regulatory enforcement has become a sustained, multi-front wave of legal, activist, and reputational pressure. This shows an increasing concern on the topic: the controversial events over GHG emissions have shifted from isolated incidents to more structural issues, especially for those sectors where emissions are critical to revenue generation.

Figure 2 : Trends in reported controversial events over GHG emissions impact

From 2012 to 2019, controversies averaged just 1-4 events per year. Cases were predominantly direct emissions violations or regulatory penalties and fines from agencies responding to measured exceedances. In 2020, controversial event number dipped, most likely due to the pandemic gap: pandemic-related delays in regulatory proceedings, court schedules, and activist organising capacity, rather than genuine improvement. This resulted into a peak year in 2021, which recorded 10 events with flood of deferred litigation resolved simultaneously alongside a surge in climate-court rulings and activism. Between 2022 and 2025, a new, elevated baseline of 6–7 events per year emerged.

This increase is likely driven more by greater public scrutiny, enhanced disclosure, and growing awareness of climate-related issues than by a genuine rise in the occurrence of such events. The nature of these controversies has also fundamentally shifted towards an increased number of events that report excess of emissions and pollution.

Read more: ESG Controversies: Identifying Red Flags Across the Value Chain

Three interconnected findings emerge from fourteen years of GHG controversy data, each with direct implications for corporate climate strategy and ESG risk assessment.

Of the 60 events, 78% are concentrated in the Energy (Oil & Gas and Power) and Transportation sectors. These sectors face significant regulatory and reputational exposure and show no signs of becoming less subject to scrutiny. Nevertheless, excess emissions and pollution can occur across the value chain of any sector. Therefore, adopting air pollution protection measures that go beyond regulatory compliance can help reduce environmental impacts while mitigating legal, Financial, and reputational risks.

Furthermore, the analysis highlights that improvements in operational emissions do not necessarily indicate alignment with broader climate objectives. Reductions in Scope 1 and 2 emissions and progress on more material value-chain impacts, particularly Scope 3 emissions in sectors such as Oil & Gas and Transportation don’t always go hand-in-hand.

Before 2021, controversies primarily centered on failures to meet climate commitments and misrepresentation of emissions, whereas post-2021 events increasingly reflected activist scrutiny and controversies related to measurable emissions violations.

After the 2021 peak, frequency settled at 6-7 events per year, without returning to baseline. Failure to meet climate commitments remains the leading cause at 27%, underscoring the gap between pledges and performance and highlighting the need for stricter scrutiny among commitments and real actions.

The evolution from isolated regulatory violations to broader scrutiny involving litigation, activism, and reputational challenges shows that controversies can act as an early warning signal of emerging risks. Investors should integrate controversy analysis into climate risk frameworks to identify companies facing increasing stakeholder pressure before risks translate into Financial impacts.

Failure to meet climate commitments represents the largest driver of GHG-related controversies (27%), highlighting the risk of a widening gap between corporate pledges and actual decarbonisation progress. Investors should evaluate whether climate targets are supported by credible transition plans, including capital allocation, operational changes, interim milestones, and alignment between short-term business strategies and long-term climate objectives. Companies revising or weakening previously announced targets should be subject to increased scrutiny.

Misrepresentation of emissions is the second most frequent controversy driver (23%), demonstrating that reliance solely on corporate disclosures may underestimate climate-related risks. Investors could complement reported data with verified and validated ones, external indicators, regulatory records, controversy monitoring, and independent assessments of emissions performance. Particular attention should be given to sectors where emissions measurement directly affects regulatory compliance or product claims.

Note: This report focuses specifically on the GHG impact category within Inrate’s broader controversy framework. It should be read alongside sector-level ESG assessments for a complete view of corporate environmental performance.