Dow (DOW) Climate Transition Analysis Update

Dow, the global chemical company aims for carbon neutrality by 2050. However, analysis by Planet Tracker suggests Dow’s mid-term climate strategy is not ambitious enough to align with the well-below 2°C pathway, instead aligning closer to a 3°C warming scenario by 2030.

Even if Dow meets its 2030 ambitions, its 4% total emissions reduction target is modest compared to peers.  Recently implemented supplier and customer engagement efforts have key data gaps, and the impact of executive incentives linked to sustainability is unclear.

With potential carbon pricing costs of up to USD 1.9 billion annually by 2030 and risks from climate events, Dow’s planned increase in sustainability spending (from 36% of 2023 expenditures to up to 60% by 2025) aims to reduce operating emissions by 15% by 2030.  However, without Scope 3 mitigation, this falls short of alignment with the Paris Agreement.

Based on Planet Tracker’s assessment, to meet the well-below 2°C pathway by 2030 and its 2050 carbon neutrality goal, Dow would need to set more ambitious reduction targets, clearly link its investments to emissions reductions, and improve transparency in its sustainability initiatives.