A UN-backed group of sustainability, business, finance and government leaders unveiled a series of recommendations aimed at developing clearer standards for net zero pledges made by businesses and other non-state entities, and avoid the use of the commitments for greenwashing.
The group, “High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities,” was convened by UN Secretary-General António Guterres in March 2022, to address the proliferation of net zero pledges emerging from companies, financial institutions, and local and regional governments, which range widely in detail, robustness and scope.
In her introduction to the report, Expert Group Chair, and former Canadian Minister of Environment and Climate Change Catherine McKenna said that the group has set “tight definitions for what it means to be net zero and net zero‑aligned,” making it clear that “non-state actors require not only long-term pledges but also short-term science-based targets as well as detailed transition plans showing immediate emissions reductions and capital expenditures aligned with these targets and their net zero pathway.”
McKenna added that the report addresses concerns raised by investors, consumers, and others, “around the use of net zero pledges that make greenwashing possible.”
The report sets out ten main categories of recommendations, including announcing a net zero pledge and setting targets, the use of voluntary credits, creating a transition plan, phasing out fossil fuels and scaling up renewable energy, aligning lobbying, just transition, increasing transparency and accountability, and speeding up the establishment of regulation.
For entities announcing a net zero commitment, the report recommends that pledges must be made publicly, and contain a series of interim targets aligned with IPCC or IEA net zero pathways to limit warming to 1.5°C. Targets would be required to be set within a year of making the net zero pledge, and cover emissions reductions across the entity’s full value chain and activities. The recommendations also state that while carbon credit purchases can play a role in emissions reduction efforts, entities must prioritize deep reductions in emissions, and that credits should not be counted towards the net zero pathway-required interim emissions reductions.
The recommendations also state that all net zero pledges should include specific targets aimed at ending the use of fossil fuels, and matched by a fully funded transition to renewable energy. For financial institutions, this would include immediately ending lending, underwriting or investing in companies planning new coal infrastructure, power plants or mines, as well as a commitment to end financing of exploration for new oil and gas fields, expansion of oil and gas reserves, and oil and gas production.
In order to increase transparency, entities would be required to annually disclose greenhouse gas data, net zero targets and the plans for meeting those targets, with reporting done in a standardized format.
The report also highlights the need for a move to regulated net zero requirements, including the development of regulations and standards for net zero pledges, transition plans and disclosure.
Commenting on the launch of the report at the COP27 climate conference, UN Secretary-General António Guterres, called on “all government leaders to provide non-state entities with a level playing field to transition to a just, net-zero future.”
“We must have zero tolerance for net-zero greenwashing.”
Click here to access the High-Level Expert Group report.