Net-zero pledges have become commonplace among corporations, financial institutions and cities, but questions abound as to whether those companies and governments have real plans in place to achieve them.
The United Nations last week launched an international panel of 16 experts, chaired by former Canadian environment minister Catherine McKenna, to recommend how best to assess, track and verify those net-zero commitments.
It is a daunting task. In many cases, corporations or local governments don’t yet know how they will achieve net-zero status by 2050. Often, they plan to rely on technology that has yet to be scaled or on offset systems whose credibility is hotly debated. They will also require massive amounts of capital from financial markets that still don’t adequately value the risks and opportunities associated with climate change.
In a June 29 webcast, McKenna and other panel members said it is critical that we have clear, practical and consistent ways to measure the progress – or lack of – that companies and sub-national governments are making toward their net-zero targets.
“We know that pledges alone aren’t going to reduce emissions, that we need to see robust delivery plans and concrete actions,” McKenna said. “We need speedy implementation; the science shows this. We’re very far from where we need to be. But the good news is we can get there; we know what the solutions are.”
Disclosure standards are being pursued by securities regulators in Canada and around the world but often with gaping holes in them. And they are being met with considerable opposition from corporate lobby groups and conservative politicians.
The expert panel’s assessment will include how low-carbon-transition efforts by corporations and sub-national governments align with national commitments made under the Paris Agreement, which aims to limit average increase in temperatures to 1.5°C.
The committee has opened consultations with the public – submissions can be made here – and it is due to report back to UN Secretary General António Guterres before the next climate summit, COP27, which will be held in Egypt in November.
We need speedy implementation; the science shows this. We’re very far from where we need to be. But the good news is we can get there.
- Catherine McKenna, former Canadian environment minister
Net-zero commitments proliferated ahead of COP26, held last November in Glasgow. Banks, insurance companies and institutional investors – including many of Canada’s biggest financial institutions – rushed to join the Glasgow Financial Alliance for Net Zero, led by former Bank of Canada governor Mark Carney. However, critics in Canada argue the banks have not produced credible plans to achieve their goals.
Cities, states and provinces around the world announced net-zero commitments. Even some of the world’s leading oil and gas companies say they aim to be net-zero by 2050.
In Canada, producers in the Oil Sands Pathways to Net Zero Alliance announced a goal of being net-zero in their operations by 2050, although that target does not include emissions from processing or the burning of their products. The oil sands producers’ plan relies heavily on carbon capture and storage and offset credits, both controversial approaches.
Broadly speaking, net-zero pledges amount to mere aspiration or greenwashing if they are not backed by science-based strategies. Those must include concrete actions geared to meet a series of short-term targets, full participation of company boards and top executives, and rigorous transparency and public accountability measures.
In the webcast, McKenna drew on a quote from Guterres: “The world is in a race against time. We can’t afford slow movers, we can’t afford fake movers, and we can’t afford any kind of greenwashing.”
One area of focus will be the lobbying practices of corporations that make lofty pledges on the one hand and then quietly work to erect roadblocks to progress on the other.
Spain’s Helena Vines Fiestas – a former senior executive at BNP Paribas and advisor to the country’s financial markets authority – said we need to have greater transparency to ensure that public pledges on climate action are not counteracted by quiet lobbying, either directly or through industry groups to which the companies belong.
Most reports from the Intergovernmental Panel on Climate Change have pointed to lobbying by energy companies as a key barrier to greater action and ambition on a clean energy transition.
It’s important that publicly announced climate strategies are “actually aligned with public policy positions, whether directly or within the company’s circle of influence,” Vines Fiestas said.
Correction, July 5, 2022:
A previous version of this story erroneously referred to Helena Vines Fiestas as a senior exective at BNP Paribas. She is in fact a former senior exective at BNP Paribas. Corporate Knights regrets the error.