“Credibility gaps” in net-zero targets

Although more than one-third (702) of world’s largest publicly traded companies now have net-zero targets, two-thirds (65 per cent) of corporate targets do not yet meet minimum procedural reporting standards.

These figures come from the Net Zero Stocktake analysis of net-zero commitments by the Net Zero Tracker and shows that corporates and sub-national governments are falling short. Indeed, the climate targets are so vague as to risk being seen as greenwashing, particularly in those from the sectors with the greatest emissions.

This suggests that reputation-conscious companies with large emissions footprints are more likely to set net-zero targets that are symbolic in nature, without the detailed plans required to achieve them. Or at worst, they are “flat-out greenwashing”.

“The growth of net-zero targets has provided a governance framework of unprecedented scale and scope - carving out an achievable path to global decarbonisation. But our analysis clearly shows major flaws in current net zero target-setting practice across all entities,” Dr Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute, said.

Overall, targets set by non-state actors are “alarmingly weak” and will face increasing scrutiny as UN, national and NGO-led accountability initiatives ramp up. For example, UN Secretary General, António Guterres, recently launched the High-level Expert Group to “develop stronger and clearer standards” for net-zero emissions pledges by non-state actors, including businesses, investors, cities and regions, to accelerate implementation.

Furthermore, increased financial reporting on climate risk, orchestrated by initiatives such as the Taskforce on Climate-related Financial Disclosures (TCFD), is contributing to net-zero momentum. And amongst the G7 the UK, France and Germany “lead the pack” solely on the quantity of corporate net-zero targets. The US lies in sixth place, only just ahead of Italy. However, more crucially, the metrics of quality in corporate targets remain low across the board.

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