Nearly half the world’s biggest companies have pledged to erase their carbon footprints by around the mid-century. However, only a handful have credible game plans for doing so, according to climate policy research groups.
Without tangible action from firms, the Net Zero Stocktake 2023 report warned that capping global warming at Paris agreement-aligned levels will likely remain out of reach.
Net zero pledges
Around 1C of warming to date has made extreme weather more destructive and deadly. UN climate experts have said the world could breach the 2015 Paris treaty limit of 1.5C above the preindustrial benchmark within a decade. The treaty set a core goal of trying to limit warming to 1.5C. It also seeks to cap it at “well under” 2C.
Reports from the Intergovernmental Panel on Climate Change have shown that 2C of global warming will be catastrophic. The rise will dramatically increase the risk of extreme weather and poverty. Moreover, it threatens to devastate ecosystems, including through habitat loss for species. For instance, 99% of coral reefs, which support around 25% of ocean life, are unlikely to survive 2C of warming.
Speaking to Agence France-Presse, co-author of the Net Zero Stocktake report John Lang – from the Energy & Climate Intelligence Unit – said:
The big question is whether existing net zero targets will acquire the measures of credibility quickly enough to keep the Paris Agreement’s temperature goals within reach.
Taking into account national, regional, and corporate pledges, some 90% of the global economy has climbed on board the ‘net zero’ bandwagon. This is up from 15% four years ago.
In business, 929 companies on the Forbes 2000 list have set targets to eliminate their emissions by around 2050. This is more than twice as many as in December 2020.
Most do not meet the minimum requirements
However, measuring these CO2-purging pledges against the yardstick of half-a-dozen standards for the assessment of net zero claims shows that almost all fall down badly on the details. Lang said:
Most entities that have pledged net zero do not meet minimum requirements for what good net zero looks like.
Only 4% of corporate commitments are in line with five “starting line” criteria set out in the UN Race to Zero guidelines, one of the voluntary standards.
These basic benchmarks include:
- Setting a specific net zero target.
- Covering greenhouse gases other than CO2, such as methane and nitrous oxide.
- Very limited use of carbon offsets, such as planting trees, instead of emissions reductions.
- Annual reporting on progress toward both interim and long-term targets.
Arguably, no sector is under more pressure to decarbonise than the fossil fuel industry. 75 of the 112 largest of these firms have net zero targets today. This is 50% more than a year ago.
However, the report said that most of these targets are “largely meaningless”. This is because they do not include so-called ‘scope three’ emissions. These are downstream impacts, such as the CO2 released by the burning of the oil, gas, or coal.
Overall, barely a third of the corporate net zero targets examined included scope three.
Net zero concept is a ‘joke’
The UN Race to Zero – and the net zero concept on which it rests – has also met with criticism previously. In the run up to the UN climate conference in Glasgow in 2021, the campaign group Glasgow Calls Out Polluters released a report. It was titled Race to Zero (credibility): How flagship Net Zero initiatives at COP26 are sciencewash. The group called the net zero concept a “joke”.
As the Canary has previously reported, net zero doesn’t mean absolutely no carbon emissions. It’s essentially a plan to ensure the amount of carbon emitted by a country or organisation isn’t more than the amount of carbon they ensure is removed from the atmosphere.
Criticism of the concept stems from the fact that the calculations can include unrealistic claims about nature’s carbon-storing capacity, uncertain technologies, and highly contested energy ‘solutions’. What they can lack, meanwhile, is a plan to dramatically lower emissions by reducing and ultimately ending fossil fuel use.
‘No rowing back’
Despite criticism of the net zero agenda suggesting that it does not adequately address the climate crisis, the corporate landscape has been rowing back from even these commitments.
Last month, half-a-dozen members of the Net Zero Insurance Alliance – launched in 2021 – backed out of the group. Meanwhile, some large institutional investors have softened their net zero pledges as well. Lang said:
People are realising that it’s not a fad, and as they turn their attention to the ‘how’ of net zero we are seeing pushback.
But there’s no rowing back from where we are now.
Lang predicted that voluntary compliance schemes will gradually give way to regulations and shifts in market-based incentives.
Already today, the Inflation Reduction Act (IRA) in the US and the Net Zero Industry Act in the EU are shifting hundreds of billions of dollars from carbon-polluting to clean energy.
Mounting pressure
In 2023, more than $1.7tn will be invested in carbon-free energy, compared to $1tn going into energy and power from oil, gas, and coal, according to the International Energy Agency (IEA). For the first time this year, investment in solar power will outstrip that in oil.
On top of this, some incumbent energy firms, such Danish multinational Orsted, have successfully transitioned from fossil fuels to renewables. Lang commented:
Slowly but surely the narrative is changing.
I do think we will live to see the day where the social license to operate of fossil fuel companies will be withdrawn.
The NewClimate Institute, Oxford Net Zero, and Driven EnviroLab also contributed to the Net Zero Stocktake 2023 report.
Additional reporting by Agence France-Presse
Featured image via Carl Young / Wikimedia, cropped to 1910×1000, licensed under CC BY-SA 4.0
