Zero Tolerance for Greenwashing Net Zero
Will there be zero tolerance for greenwashing net-zero initiatives?
Governments and companies across the planet continue to make commitments to achieve the net-zero goals they have set, but because of loopholes, legal inconsistencies, and varying rigor associated with how the criteria and benchmarks for the commitments are implemented and enforced, net-zero greenwashing continues to grow.
Roughly a third of the world’s largest companies have set net-zero goals - a strong show of commitment by the private sector in addressing climate change. But only 7% of these companies are on track to accomplish them.
So what’s the disconnect? Why are companies making strong commitments but not delivering on them? In many cases, these companies have made commitments for the optics but skipped the most important step: setting a detailed, feasible strategy and securing the funding to achieve that strategy.
In early November, to help companies set net-zero commitments based on strategies, the UN brought together a group of high-level experts who published a report with ten recommendations for credible net-zero pledges.
The report provides a roadmap for private sector entities for transition to carbon-free operations under four key areas:
✅ Environmental Integrity
✅ Credibility
✅ Accountability
✅ Role of Governments
Of the recommendations that came out of this process, here’s what you need to know:
Companies should not use their pledges as an effort to cover up the negative environmental impacts of their core products and activities. They need to acknowledge their existing impact as part of establishing their commitments.
Within their commitments to net-zero, companies should include a detailed strategy of how they plan to transition to carbon-free. By providing a plan with clarity on the specific steps that will be taken, companies are able to be held accountable for their progress in making the journey towards reaching these goals.
When making a pledge, companies should then be transparent in communicating the successes and setbacks in achieving that progress in their reports.
As governments continue to shift from voluntary initiatives to having a regulated requirement for net-zero, companies will need to ensure they are complying with current verification and enforcement mechanisms in place related to their net-zero commitments.
Here is the 10-step process defined in the UN’s “Integrity Matters” to help map your net-zero journey:
Announce a Net Zero Pledge
Set Net Zero Targets
Use Voluntary Credits
Create a Transition Plan
Phase out of Fossil Fuels and Scale Up Renewable Energy
Align Lobbying and Advocacy
Add People and Nature in the Just Transition
Increase Transparency and Accountability
Invest in Just Relations
Accelerate the Road to Regulation
Recent action on corporate climate change commitments
During the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27), governments came together in an attempt to make progress towards the climate goals set under the Paris Agreement, notably to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels.
While at COP27, President Joe Biden highlighted the newly proposed Federal Supplier Climate Risks and Resilience Rule to support his executive orders on climate-related financial risk and catalyzing clean energy industries and jobs through federal sustainability.
In an effort to measure and mitigate the associated risks of climate change on communities and the economy, the proposed rule will use previously established standards and frameworks that companies are already using to require them to disclose their emissions and set reduction targets.
What does this new federal supplier climate rule mean for your company?
The rule will require major Federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks. Depending on a contractor’s revenue, setting science-based emissions reduction targets may also be required.
The emissions disclosures are dependent on revenue in annual contracts received as follows:
Contract Revenue Receives > $50 Million
Required to publicly disclose Scope 1, Scope 2 and relevant categories of Scope 3 emissions
Disclose climate-related financial risks
Set science-based emission reduction targets
Contract Revenue Receives $7.5 Million to $50 Million
Required to report on Scope 1 and Scope 2 emissions
Contract Revenue Receives < $7.5 Million
Exempt from the rule
(Small Business) Contract Revenue Receives > $7.5 Million
Required to report on Scope 1 and Scope 2 emissions
From the White House announcement: “Today, more than half of major Federal contractors are already disclosing climate related information. These Federal contractors are among the 18,700 companies globally—worth more than half of global market capitalization—that voluntarily disclose emissions and climate risk through CDP, including 1,800 small and medium-sized enterprises. Further, nearly 4,000 companies globally—representing one third of the global economy’s market capitalization—have voluntarily committed to setting science-based targets.”
Measurement and reporting are critical components of the new rule. “Suppliers understand that you cannot manage what you don’t measure–tracking emissions and setting and meeting targets can increase resilience and reduce costs,” said The White House.
So, is this the first step towards zero-tolerance for greenwashing?
As regulations and benchmarks continue to unfold and the loopholes within them tighten, it will become more difficult for companies to skirt by with greenwashed net-zero commitments. Commitments are only first steps, however, to see widespread greenwashing end across industry.
Are you looking to start your net-zero journey or align with the new regulations? A good first step is to set Science-Based Targets. Uplift can help you - regardless of where you currently find yourself on your sustainability journey
Article by: Deon Glaser, VP of Sustainability and ESG at The Uplift Agency
The Uplift Agency
Uplift builds strategies, programs, and communication campaigns that advance ESG in workplaces, supply chains and communities.
We know how to navigate the road ahead because we’ve already been down it – 90 percent of our team has led environmental or social programs in corporations or nonprofits. Because ESG is all we do, our services are more comprehensive and integrated than most firms.
