Promises by companies, banks and cities to achieve net-zero emissions often amount to little more than empty slogans or “greenwashing”, UN experts said in a report on Tuesday.
A UN body has set out proposed new standards to harden net-zero claims.
Its report, released at the COP27 climate conference in Egypt, is intended to draw a “red line” around false claims of progress in the fight against global warming that can confuse consumers, investors and policy makers.
At last year’s climate negotiations in Glasgow, UN Secretary-General Antonio Guterres appointed 17 experts to review the integrity of non-state net-zero commitments amid concerns about “a surplus of confusion and deficit of credibility” around corporate climate claims.
“Too many of these net-zero pledges are little more than empty slogans and hype”, group chair and Canada’s former environment minister Catherine McKenna said during a news conference launching the report.
“Bogus net-zero claims drive up the cost that ultimately everyone will pay,” she said.
Tough Rules Needed
Regulators across the world are starting to set tougher rules around what activities can be deemed environmentally friendly, yet progress is patchy and campaigners and activists are increasingly turning to the courts to challenge weak claims.
On Tuesday, an official at Australia’s corporate watchdog said it was investigating several companies over greenwashing, in which a company or group makes exaggerated claims over the environmental impact of their products or practices.
Last month, meanwhile, Britain’s financial watchdog proposed new rules from 2024 for funds and their managers to prevent consumers being misled about their climate credentials.
An estimated 80% of global emissions are now covered by pledges that commit to reaching net-zero emissions.
New Zealand’s Climate Change Commission chair Dr Rod Carr is part of the international group calling out companies claiming to be net-zero but merely giving lip service.
He helped write the report for the UN which says too often private sector pledges lack credibility. The group has called for greater regulation.
Carr told Nine to Noon some firms claimed to be net-zero but were actively lobbying against emissions reductions.
“The undermining of genuine efforts to reduce gross emissions by businesses by these sort of potentially less than permanent claims about offsets that essentially obfuscate or hide the real effort that is needed to reduce global warming,” Carr said.
He said a third of the world’s largest companies have made net zero claims, yet less than half of them have released plans on how they would actually do that.
The report set out a list of recommendations that companies and other non-state actors should follow to ensure their claims are credible. For example, a company cannot claim to be net-zero if it continues to build or invest in new fossil fuel infrastructure or deforestation.
The report also dismisses the use of cheap carbon credits to offset continued emissions as a viable net-zero strategy, and recommends companies, financial institutions, cities and regions focus on outright emissions and not carbon intensity – a measure of how much carbon is emitted per unit of output.
The report was “potentially very significant, depending on the traction it gets”, said Nordea Asset Management head of responsible investments Eric Christian Pedersen.
“If this report becomes a legal standard against which one can measure if a net-zero commitment is bona fide or not, then it… can provide ammunition for the lawsuits and regulatory action which are sorely needed to make the absence of climate action more expensive at the individual company level.”
The report “gives companies, investors, cities, regions – and by implication, countries – a clear statement of what ‘good’ looks like”, said Thomas Hale, a global public policy researcher at Oxford University and co-leader of the Net Zero Tracker project which measures the effectiveness of such pledges.
“We need to be clear that most net-zero targets are not on track,” he said, noting the tracker found that only half of companies with pledges have robust plans.
Teresa Anderson, global lead for climate justice at poverty-eradication non-profit ActionAid International, said corporations had “long hidden behind net-zero announcements and carbon offsetting initiatives, with very little intention of really doing the hard work of transforming and cutting emissions.”
“These recommendations will aim to keep them in line and close any loopholes.”
- Reuters with additional editing by Jim Pollard