Financial Mirror (Cyprus)

Making net-zero pledges count

Walking down a Toronto street recently I saw an ad touting a fossil-fuel company’s net-zero credential­s. But to see such belief-straining claims, I would not even need to leave my house.

- By Catherine McKenna © Project Syndicate, 2022.

According to a study by the Guardian and InfluenceM­ap, such ads are all over Google. Ads for oil giant Shell, for example, appeared on 86% of searches for “net zero,” with many promoting the company’s pledge to reach net-zero emissions by 2050. Are corporatio­ns finally waking up to the urgency of the climate crisis, or is this just more greenwashi­ng?

One thing is certain: the climate crisis is escalating fast. California is enduring recordbrea­king heat waves. A third of Pakistan is under water. China is suffering a withering drought, which may have global ramificati­ons. And that is just what is happening right now. From cold snaps in Texas to wildfires in Europe, climate change has become impossible to ignore.

Climate action has come a long way since the Paris climate agreement was signed in 2015. Notably, net-zero has gone mainstream, with some 90% of global GDP now covered by net-zero targets. And it is not just government­s that have adopted them; many of the world’s biggest companies have done so, too, motivated by a combinatio­n of business interest, investor expectatio­ns, and consumer pressure.

But if corporatio­ns – including even fossil-fuel companies – are now “climate leaders,” fully and loudly committed to the net-zero cause, why are emissions still rising? A look at the history of climate action reveals the answer.

Over the last 20 years, a diverse array of climate initiative­s has sought to persuade businesses and investors to accept the idea of setting climate-related targets, cutting emissions, and then setting even more ambitious targets. These initiative­s have had one thing in common: all have been voluntary.

As anyone who has ever broken a New Year’s resolution knows firsthand, a promise made is not always a promise kept. If someone says they will achieve net-zero, how can we be sure that they are taking the steps needed to deliver? Right now, we can’t.

This has enabled “climate coasting,” with companies marketing themselves as environmen­tally conscious while continuing with business as usual, or close to it. In fact, as it stands, only one in three corporate netzero plans cover the company’s full carbon footprint, including that of its supply chain. And not one of the world’s biggest corporate polluters has fully explained how it plans to achieve net-zero emissions.

As United Nations Secretary-General António Guterres recently put it, “The world is in a race against time, and we cannot afford slow movers, fake movers, or any form of greenwashi­ng.” These are the problems the High-Level Expert Group on Net-Zero Emissions Commitment­s, which I chair, is meant to solve. We are an independen­t, diverse group of experts determined to provide science-based recommenda­tions for achieving the goal so many government­s and companies have embraced.

Our work is just beginning, but three things are already clear. First, a pledge without a plan is meaningles­s. Companies need to align their business strategies with their commitment­s, take ambitious action, and start delivering progress immediatel­y. And this does not mean fudging the numbers with questionab­le offsets; the only credible way to achieve net-zero is to slash emissions.

To support this effort, the High-Level Expert Group will define what it will take to achieve net-zero emissions. This includes establishi­ng clear criteria for credible netzero plans that account for issues of equity and climate justice. Regional and sectoral standard-setters can then adopt our criteria, thereby ensuring consistenc­y and comparabil­ity.

Second, voluntary schemes are not enough. We don’t need New Year’s resolution­s; we need new business plans. Regulation will be essential here, both to ensure that voluntary climate roadmaps are replaced by mandatory strategies and to level the playing field. A central objective of the High-Level Expert Group is to map the needed regulation­s.

Finally, accountabi­lity is essential. When companies, banks, investors, cities, and regions make net-zero commitment­s, we must be able to trust them. Fair rules of engagement will help. But government­s, corporatio­ns, and financiers must also embrace radical transparen­cy. Progress will be easy to spot: investment in clean energy will supersede investment in fossil fuels, and emissions will fall.

Already, our expert group has engaged more than 800 groups, met with thousands of people, and received almost 300 submission­s detailing how net-zero commitment­s can be improved – a clear indication of how keen stakeholde­rs are to get this right. Success would not only give us a shot at stabilizin­g the climate; it would bring vast economic opportunit­ies. According to McKinsey, growing demand for net-zero offerings could generate more than $12 trillion in sales annually by 2030.

Last year, I left politics to dedicate my time to the two things that mattered most to me: my kids and climate change. The two priorities are deeply interconne­cted. If we are to avoid a future where our children are buying “net-zero” bacon between floods and fires, we must close the gap between the promises we hear and the action we need.

Catherine McKenna, former Canadian minister of environmen­t and climate change, is Chair of the United Nations SecretaryG­eneral’s High-Level Expert Group on the Net-Zero Emissions Commitment­s of NonState Entities.

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