Authored by: Rebecca Berg, Policy Associate, The Climate Registry
This is Part 1 of a 2-part series that will dive into the importance of embracing transparency and accountability in the race to achieve net zero. This first piece will cover the current policy landscape and organizations that are leading the way, and Part 2 will examine how transparency and accountability are essential to achieving net zero without claims of greenwashing or greenhushing.
The Intergovernmental Panel on Climate Change (IPCC) accelerated the focus of climate action to net-zero commitments with their special report in 2018, identifying the need to sharply reduce greenhouse gas emissions and sequester carbon dioxide from the atmosphere to stay on the pathway to a 1.5 degrees Celsius increase in global temperature. Achieving this crucial goal will require that global emissions are reduced by 45 percent by 2030 and net-zero emissions are achieved around 2050¹. Human-caused climate change has already resulted in an increase in extreme weather events across the globe and will only continue to accelerate as global emissions rise. Limiting global temperatures requires unprecedented and rapid changes to reach net-zero emissions². Immediate reductions minimize transition risks by allowing for well-designed mitigation efforts to enhance food and energy security, equity, and affordability³. Every year of delay in achieving reductions in global emissions decreases the time left to reach net-zero emissions while keeping below 1.5 degrees Celsius4.
Since the IPCC report was published, thousands of public and private organizations have committed to net-zero emissions within their own operations or jurisdictions. Many of these commitments follow the 2050 timeframe prescribed in the report, while others set even more ambitious targets. Depending on the governance structure of the entity, these targets can be voluntary or codified into policy. As of June 2023, 75 percent of countries have now pledged or proposed to reach net zero, maintaining their commitment to the objectives of the Paris Agreement5. Many individual organizations have also made their own net-zero pledges, guided by voluntary frameworks, in an effort to support global targets.
In June, a Net Zero Stocktake 2023 report was published, providing insight into trends in net-zero commitments. For this report, researchers tracked over 4,000 entities, and found that 149 national governments, 145 states and regions, 252 cities, and 929 publicly-listed companies have made a commitment to achieving net-zero emissions. Progress is evident with a growing number of companies setting net-zero targets, however the majority of the largest companies in the world do not currently have a target. Announcement of net-zero target commitments from national and subnational governments have slowed, however many national governments are making progress on formalizing targets within domestic policy, advancing the rigor in which these commitments are addressed and implemented. Private firms are performing poorly in terms of setting targets and achieving measures of integrity compared with publicly-listed companies. There has been concern about the integrity of the targets from companies due to the lack of standardization in frameworks for setting and tracking net-zero targets. Announcing a commitment to achieving net-zero does not necessarily mean the target is ambitious or robust6.
A lack of robust and ambitious targets is a concern thoroughly addressed in the United Nations’ (UN) High Level Expert Group report, Integrity Matters: Net Zero Commitments by Business, Financial Institutions, Cities, and Regions. This report is trying to solve the gap in regulations on net-zero targets by setting clear recommendations. The report, released in 2022, set out to address net-zero targets and commitments for non-state actors and outline guidelines for developing and maintaining credible net-zero pledges that will support the limiting of global temperature increase to 1.5 degrees Celsius. Many of the arguments and recommendations are rooted in the importance of transparency and accountability, and strongly emphasize how these principles can help combat greenwashing. The report consists of 10 recommendations covering topics such as target setting, using voluntary credits, transition planning, phasing out of fossil fuels, just transition, and increasing transparency and accountability. Each of these recommendations provides a framework for creating robust, transparent, and credible net-zero targets for non-state actors. The report highlights the need for a global digital repository for climate disclosures that houses clear, accessible, and comparable data to demonstrate progress towards goals. They make it clear that it is essential to not only make a long-term pledge, but also to develop short-term targets and transition plans to show the organization’s pathways to achieving the overall goal and demonstrate progress towards that goal7.
There are a significant number of programs, frameworks, and guidelines that currently exist to provide direction to organizations on setting net-zero emissions targets. These programs are voluntary, and many are targeted to specific sectors. While there is a wide variety of frameworks, many of them are complementary to each other and reference other guidance and programs. The organizations providing these frameworks are committed to supporting and guiding robust and ambitious net-zero targets. While there are many more programs than the ones listed below, we are providing a few examples of the range of guidance that is currently in use by entities looking to set and achieve targets.
The International Organization for Standardization (ISO) published guidance for any business, group, or country working towards net-zero greenhouse gas emissions with the goal of addressing the fragmented net-zero governance landscape. The ISO Net Zero Guidelines provide recommendations and guidance to enable commonality across targets and support high levels of ambition, in line with a goal of achieving net-zero emissions by 2050 at the latest. The guidelines set a path of transparency, credibility, and consistency, a goal that is clearly shared within the United Nations’ recommendations. This guidance also highlights the essential components of urgency and ambition in setting and achieving long-term and interim targets for net zero to limit temperature rise to 1.5 degrees Celsius8.
The Science Based Targets Initiative (SBTi) strives to provide corporate entities with a standardized approach for setting targets that align with current climate science, including reducing global emissions by half before 2030 and achieving net zero before 2050. Their standards define and promote best practices and offer resources and guidance in an effort to reduce barriers of adopting net-zero goals. They also provide independent assessment and approval of companies’ targets. The standard lays out four key components to developing a net-zero target9. First, prioritizing significant emissions reductions in short-term targets to satisfy the overarching goal of achieving a 50 percent reduction in emissions by 2030. Second, to set a long-term target that reduces all possible emissions before 2050. Third, to neutralize any residual emissions using permanent carbon removal and storage. Lastly, financing mitigation efforts beyond the value chain to incentivize even further efforts in climate action10.
Race to Zero is a UN-backed global campaign that strives to rally companies, cities, regions, financial, educational, and healthcare institutions to take rigorous action to achieve the goals of the Paris Agreement. Their criteria outlines the minimum requirements for a robust net-zero target and lays out best practices for how entities can become leaders in the net-zero economy. The requirements outlined in the criteria include reductions across all three emissions scopes, a transparent action plan, robust short-term and long-term targets, and annual reporting to demonstrate progress11.
The Climate Registry evaluated many of the existing programs and standards during the design of the Net-Zero Portal, a free-to-use platform for organizations around the world to report their pledges and pathways, allowing them to provide a wide range of details including which standards, guidance documents, or regulatory programs informed the development of their target12.
There are also instances where net zero has become a mandate, enshrined in law, either pointing to third-party standards that already exist or tasking agencies to develop their own compliance criteria. These mandates are growing across all levels of government and range from legislation that covers entire economies to focusing on specific sectors and goals. Countries including Sweden, the United Kingdom, France, New Zealand, Denmark, and Hungary have all passed legislation mandating their net-zero targets13. In the United States, the Biden-Harris Administration has announced an Executive Order requiring net-zero emissions from federal procurement by 2050 and public disclosure of emissions and reduction targets from major federal suppliers in order to increase the sustainability of federal supply chains14. At the state level, the State of California has passed legislation requiring that state agencies achieve net-zero emissions from their operations by 203515.
These examples are just a glimpse into the frameworks and mandates that are leading the way to achieving our climate goals, but we’re still not on track to reach net zero by 205016. Getting to net zero requires extensive policies and regulations that will drive an economy-wide net-zero transition across the world17. As we continue to see progress towards these goals, we have an opportunity to learn from each other and share our knowledge to overcome challenges and collaborate on solutions. Transparency of data and processes is essential to accelerating the pace of climate action and achieving the critical goals identified by the IPCC.
Stay tuned for Part 2 of this series, discussing how transparency and accountability are critical tools to achieving net zero without claims of greenwashing or greenhushing, which will be coming out in September.