The net-zero pledges and transition plans of financial institutions and high-impact corporate emitters should be regulated to tackle greenwashing, a UN panel has recommended in a report published this week.
Warning of the risk that climate laggards will take market share from leaders, the High-Level Expert Group on Net-zero Emissions Commitments (HLEG) claims that regulation is necessary to “make net zero work and to create a level playing field across organisations”.
The report also calls for establishing a new taskforce on net-zero regulation to bring together international regulators and experts to address the challenge of fragmented regulatory regimes. Introducing appropriate regulation will require multiple actors playing complementary roles, it says, building on existing voluntary standards and initiatives.
“Voluntary commitments can only take us so far,” the HLEG makes clear, pointing out that two-thirds of the largest listed businesses still lack a net-zero pledge. “If greenwash premised upon low-quality net-zero pledges is not addressed, it will undermine the efforts of genuine leaders, creating both confusion, cynicism and a failure to deliver urgent climate action,” it warns.
Net-zero targets and plans must also have integrity, the report says, as well as being ambitious, credible, fair and transparent.
“Non‑state actors cannot claim to be net zero while continuing to build or invest in new fossil fuel supply,” HLEG chair and former Canadian environment minister Catherine McKenna said in a forward to the report. The use of carbon credits or focusing on emissions intensity are also incompatible with net zero, she added, also criticising corporate lobbying to undermine ambitious government climate policies.
UN secretary general António Guterres was even more direct. “Let’s tell it like it is,” he said in a speech launching the report at Cop27. “Using bogus net-zero pledges to cover up massive fossil fuel expansion is reprehensible. It is rank deception. This toxic cover-up could push our world over the climate cliff. The sham must end.”
“I will closely follow the proposed Taskforce on Net-Zero Regulations,” he said.
Launched in March, the HLEG is charged with developing “stronger and clearer standards for net-zero emissions pledges by non-state entities.” It consists of 16 independent experts, including former People’s Bank of China governor Zhou Xiaochuan, former Reserve Bank of New Zealand deputy governor Rod Carr, and former Mali prime minister Oumar Tatam Ly.
This page was last updated November 17, 2022
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