Report finds that while more companies are committing to ‘net-zero’ climate targets, most lack credible plans to reach their goals

A new report reveals that a growing number of companies are taking action to reduce their greenhouse gas emissions and pledging to achieve “net zero” targets as part of global efforts to tackle climate change.

However, the report notes that these goals are often not supported by credible plans, posing a risk to achieving the target. According to the report, businesses need to adopt more ambitious emissions reduction strategies and set ambitious, clear, and well-defined targets.

The report also highlights the need for companies to align their plans with the Paris Agreement’s objective of limiting global warming to 1.5 degrees Celsius above pre-industrial levels. Only by doing so can they play their part in preventing the worst impacts of climate change.

The concept of achieving net zero is to cease adding greenhouse gases to the atmosphere by either preventing emissions from being created in the first place or removing an equivalent amount through natural or technological methods. Scientists warn that the world must achieve net-zero emissions by 2050 to limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) in comparison to pre-industrial times.

This is a crucial target in the fight against climate change and requires a significant shift towards the development and adoption of low-carbon technologies and practices. In order to avoid the worst impacts of climate change, reducing emissions to net-zero is essential, especially considering that the effects of global warming are already visible around the world.

Achieving net-zero emissions is a challenging task but a critical one. It requires significant efforts from governments, businesses, and individuals worldwide, from reducing carbon footprints to investing in clean energy and carbon capture technologies. It is a joint responsibility to act swiftly and decisively to cut emissions and limit global warming levels.

The objective of reaching net zero emissions has gained momentum in recent times. The number of countries with such targets has risen from 124 in late 2020 to 149, while the number of publicly traded companies aiming for net-zero has surged from 417 to 929, as stated in the Net Zero Stocktake report compiled by experts from four independent research organizations.

This growing interest in net-zero emissions is a positive development in the struggle against global warming and its catastrophic consequences. The increase in commitments from both governments and corporations demonstrates a willingness to take action and address the enormity of the climate crisis.

However, it is important to note that achieving net-zero requires not only setting ambitious targets but also implementing effective strategies and measures to reach those targets. Moreover, it will require significant investments in clean energy and other low-carbon technologies, and the reduction of emissions from all sectors, including transportation, agriculture, industry, and buildings. It will require a collaborative approach, with the involvement and support of all stakeholders to meet this critical goal.

Takeshi Kuramochi, one of the authors of the Net Zero Stocktake report, points out that more cities and companies are talking about their net-zero goals, and even supermarkets are promoting climate-neutral or carbon-neutral products. However, he points out that it is unclear what those terms exactly mean and whether or not such efforts will contribute effectively to the global transition towards net-zero emissions.

The report highlights the importance of having credible plans and increased transparency from companies and governments in achieving their net-zero goals. Without such transparency, it will be difficult to assess the progress of these entities towards reducing their emissions and meeting their targets.

Moreover, it is essential to ensure that efforts towards a net-zero future are not just cosmetic. Instead, they should be backed by clear and actionable strategies, robust emissions measurements, and accurate reporting mechanisms. This level of transparency and accountability will be necessary to make sure that these goals are meaningful, measurable, and effective.

While there are clear definitions and criteria for national-level targets for achieving net-zero emissions, the same cannot be said for sub-national or company-level targets, as per the Net Zero Stocktake report. The absence of clearly defined criteria makes it challenging to evaluate the efficacy and credibility of these efforts.

This lack of clear criteria poses a considerable risk since companies and cities that claim to aim for net-zero may apply different approaches and assumptions, which could lead to inaccurate results and inadequate actions. There is, therefore, a need for a consistent framework of metrics, goals, and methodologies to ensure that efforts aimed at reducing emissions are transparent, effective and credible.

Creating clear guidelines and criteria will also assist in achieving a clear and comprehensive picture of progress towards reaching net-zero to make informed decisions and accelerate effective responses to climate change’s challenges.

To assess the credibility of corporate claims of achieving net-zero emissions, the authors of the Net Zero Stocktake report have created a basic checklist. The checklist is based on a United Nations campaign called Race to Zero and includes several key criteria.

Some of the criteria include setting interim targets and covering all the emissions a company is responsible for, including those resulting from the use of its products. This approach of setting interim targets is crucial so that companies can monitor their progress and make adjustments where necessary, thereby increasing the likelihood of achieving the net-zero target.

The report recommends that companies adopt this checklist as a starting point when setting their targets and creating roadmaps to achieve them. By addressing these critical prerequisites, companies will be able to increase their chances of achieving their net-zero goals meaningfully.

According to Takeshi Kuramochi, a senior climate policy researcher at the Germany-based NewClimate Institute, less than 5% of the companies examined in the Net Zero Stocktake report passed the checklist criteria to achieve net-zero goals.

This low figure highlights the urgent need for companies to implement credible and effective plans and strategies to meet their net-zero targets and reduce their greenhouse gas emissions. The report shows that while more companies are committing to achieve net-zero emissions, there is still a long way to go to ensure that such commitments translate into action that is transparent, credible, and effective.

The report’s findings also reinforce the urgent need for greater transparency and accountability at all levels, especially among companies and governments. By increasing transparency and accountability, all stakeholders will be more informed and better able to identify gaps and areas that require improvement, thereby increasing the chances of success in the pursuit of net-zero emissions.

Several companies have faced criticism for making questionable claims about their environmental efforts, which have raised concerns about their accountability and sincerity in the fight against climate change. In particular, fossil fuel companies have been accused of greenwashing by excluding some of the emissions caused by their business, such as the burning of oil and gas by consumers.

The practice of greenwashing, which involves making misleading or false claims about environmental efforts, risks exacerbating the climate crisis, by giving a false impression that real progress is being made.

This highlights the importance of increased transparency and adherence to established guidelines and criteria. Implementing accurate measurements and reporting mechanisms for greenhouse gas emissions, including all the emissions the company is responsible for, is crucial in establishing credibility and creating a roadmap for success towards a net-zero future. It is therefore paramount for companies and governments to prioritize transparency, accountability, and credible plans when working towards net-zero targets.

Recently, the UK’s Advertising Standards Authority (ASA) upheld complaints against energy giants Shell and Repsol for their ‘net-zero’ advertising campaigns, citing their failure in being transparent about their high-emissions business activities. As a result, the ASA censured Spanish oil and gas company Repsol, and upheld a complaint against energy giant Shell, for adverts that failed in their attempt to clarify the extent of their business activities that produce high emissions.

Takeshi Kuramochi, a senior climate policy researcher at the NewClimate Institute, anticipates more cases of litigation arising from misleading climate claims in the future. Instead of “greenwashing” their net-zero goals, Kuramochi advises companies to focus on achieving significant cuts in emissions immediately, primarily by developing a more substantial focus on the importance of setting ambitious targets and implementing more effective reduction strategies that will lead to greater successes in reducing emissions. It is more beneficial if companies can adopt more transparent goals than opaque goals hidden behind vague terms like net-zero.

The Net Zero Stocktake report was compiled by experts from four independent research organizations, including the Energy and Climate Intelligence Unit at the University of North Carolina, the Data-Driven EnviroLab, the NewClimate Institute, and the Oxford Net Zero group.

This report follows a recent peer-reviewed study in the journal Science, which questioned the credibility of national-level net-zero targets. The study raised concerns that many of these targets were based on insufficient planning and insufficient action. Furthermore, the study’s findings suggested that the targets were not being achieved due to a lack of collaboration and coordination across different sectors and governments.

Together, these reports signal a pressing need for greater transparency, accountability, and more robust, well-defined, and credible efforts towards achieving net-zero targets. With the credibility of net-zero targets at stake, it is essential to take the time to plan carefully, implement effective strategies, and make security a top priority.

According to a recent peer-reviewed study published in Science, taking government climate pledges at face value risks exaggerating the likelihood of achieving the 1.5-degree Celsius warming limit. The authors recommend considering current policies and only those net-zero targets that are deemed “high confidence” to put the world on the path of limiting warming to 2.4 degrees Celsius above pre-industrial times.

If current policies and modest net-zero targets are adopted, the world could see a 2.4-degree Celsius increase from pre-industrial times, leading to significant detrimental effects of climate change. Ignoring the effects of inadequate policies and targets could exacerbate the climate crisis and pose severe challenges for communities worldwide.

The study’s findings reinforce the need for more ambitious targets and significant efforts from governments, businesses, and individuals. Achieving net-zero emissions requires a comprehensive road map with concrete targets, verifiable results, and effective scaling of low-carbon and carbon capture utilization technologies. The study emphasizes that communities worldwide need to work towards such goals in a collective effort to prevent the worst effects of global warming.

As negotiators from almost 200 countries gathered for the U.N. climate talks in Bonn, Germany, a study published in Science recommended that national net-zero plans should be set in law, specifying a clear path of near-term targets with sector-specific goals.

The study’s authors emphasize the need for a clear roadmap to achieving net-zero emissions, with implementation plans that are consistent with the Paris Agreement’s objective of limiting global warming to 1.5 degrees Celsius. By setting firm plans in place, governments can help promote cost-effective strategies and encourage investments in low-carbon technologies and innovations.

The need to focus on sector-specific goals is highlighted in the report, suggesting that this approach can concentrate efforts on prioritizing sectors with the most significant emissions and identify opportunities for effective reduction across all sectors. Overall, the report’s recommendations offer valuable insights into establishing feasible, transparent, and durable policies for achieving net-zero emissions.