A UN Group of Experts Proposes Rules for Net Zero Commitments

A group of sustainability, industry, financial, and government professionals backed by the United Nations published a number of recommendations aimed at developing clearer requirements for net zero promises made by enterprises and other non-state entities and preventing greenwashing.

In March 2022, UN Secretary-General António Guterres convened the "High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities" to address the proliferation of net zero pledges emerging from companies, financial institutions, and local and regional governments, which vary widely in detail, robustness, and scope.

Catherine McKenna, former Canadian Minister of Environment and Climate Change and Chair of the Expert Group, stated in the report's introduction that the group has established "tight definitions for what it means to be net zero and net zeroaligned," making it clear that "non-state actors require not only long-term pledges but also short-term science-based targets as well as detailed transition plans showing immediate emissions reductions and capital expenditures aligned with these"

McKenna noted that the report addresses concerns voiced by investors, consumers, and others "about the use of net zero pledges that facilitate greenwashing."

The report outlines ten main categories of recommendations, such as announcing a net-zero commitment and establishing targets, the use of voluntary credits, developing a transition plan, phasing out fossil fuels and scaling up renewable energy, aligning lobbying, just transition, increasing transparency and accountability, and accelerating the establishment of regulations.

The paper suggests that entities announcing a net zero commitment make their commitments public and provide a series of interim targets matched with IPCC or IEA net zero pathways to prevent warming to 1.5°C. Targets would be expected to be established within a year after committing to net-zero emissions, and would encompass emission reductions across the whole value chain and activities of the company. In addition, the proposals suggest that while carbon credit purchases can play a part in emission reduction efforts, businesses must prioritize deep emission reductions, and credits should not be considered toward the interim emissions reductions required under the net zero pathway.

In addition, the proposals suggest that all net-zero commitments should contain explicit targets for phasing out fossil fuels and a fully supported transition to renewable energy. For financial institutions, this would entail a pledge to cease financing exploration for new oil and gas fields, increase of oil and gas reserves, and oil production.

In order to promote openness, entities would be required to provide annually in a standardised format greenhouse gas data, net zero targets, and plans for attaining these targets.

The research also emphasizes the necessity for a transition to regulated net-zero requirements, including the creation of laws and standards for net-zero commitments, transition plans, and disclosure.

Commenting on the publication of the study at the COP27 climate summit, UN Secretary-General António Guterres urged "all government leaders to level the playing field for non-state entities to transition to a just, net-zero future."

Guterres continued:

We must have zero tolerance for greenwashing involving net-zero emissions.