Cop27, which closed last week in Egypt, really put it up to the business community.
A report from the UN’s Expert Group on the Net Zero Emissions Commitments of Non-State Entities accused the business community and financial institutions, as well as regions and cities, of, if not being dishonest in relation to reducing carbon emissions, then doing little more than paying lip service to it.
Entitled Integrity Matters, the report’s subheading of ‘time to draw a red line around greenwashing’ made its finding clear.
According to Catherine McKenna, chair of the Group, “the window to limit dangerous global warming and ensure a sustainable future is quickly closing”. That fact has already been playing out in front of us in this year alone, from severe drought in China to wide-scale flooding Pakistan.
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And while “the curve of global emissions is bending,” McKenna says it is not happening quickly enough to limit temperature rise to 1.5°C. Yet instead of being on track to fall by 45% by 2030, emissions are set to increase by close to 11%.
This is despite the ground-breaking accords of COP21 in Paris in 2015, which gave rise to the first ever universal, legally-binding global climate change agreement.
In the years since, many corporations (as well as cities, states and regions) have made voluntary commitments to reach net zero.
This is commendable, the report says, “but in the absence of regulation, too many of these pledges are not aligned with the science, do not contain enough detail to be credible, and use the terms net zero or net-zero aligned - as well as many other similar terms – inconsistently”, not to say disingenuously.
Such “deceptive or misleading net-zero claims” don’t just erode public confidence in net zero pledges, they undermine sovereign state commitments and understate the work required to achieve global net zero, it finds, calling for regulation to ensure consistency, rigour and enforceability.
For businesses, that means no more fudging.
The report calls for an end to the expansion of coal reserves for power generation, an end to the development and exploration of new coal mines and oil wells, and an end to the extension of existing ones.
It wants renewable energy procurement targets to be included as part of net-zero transition plans and it also takes aim at fossil fuels’ “financial enablers”. For financial institutions, it calls for an immediate end to lending, underwriting and investing in any company planning new coal infrastructure, power plants and mines.
On oil and gas, the expert group wants phase-out policies from financial institutions that include a commitment to end financing and investing in support of exploration for new oil and gasfields, and an end to the expansion of existing ones.
Financial institutions should create investment products aligned with net-zero emissions by 2050 and facilitate increased investment in renewable energy, it says.
All non-state actors must reduce emissions as fast as possible, aligning with or exceeding national targets, roadmaps and timelines. “Those that have the capacity to move faster than a 50 per cent reduction by 2030 and net zero by 2050 should do so,” it urges.
Some developing country non-state actors may require more support on their path to net zero. “Multinationals should set global targets that account for variability across jurisdictions and include all operations along their value chain in all jurisdictions,” it says.
They should publicly disclose and report on progress against those targets, ensuring that “any claims of being net zero, or net zero-aligned, are based on actions, not just announcements.”
Pledges should see interim targets published every five years starting in 2025 and must cover all greenhouse gas emissions and all scopes of emissions. For financial institutions, this means all financed activities. For businesses, it means all emissions - direct, indirect and those originating from supply chains.
UN secretary general António Guterres pulled no punches in response to the report. “Using bogus ‘net-zero’ pledges to cover up massive fossil fuel expansion is reprehensible,” he said. “It is rank deception. This toxic cover-up could push our world over the climate cliff. The sham must end.”
