© Reuters. FILE PHOTO: The United Nations headquarters building is pictured though a window with the UN logo in the foreground in the Manhattan borough of New York August 15, 2014. REUTERS/Carlo Allegri/File photo
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By Gloria Dickie and Simon Jessop
SHARM EL-SHEIKH, Egypt (Reuters) -Promises by companies, banks and cities to achieve net-zero emissions often amount to little more than greenwashing, U.N. experts said in a report on Tuesday as they set out proposed new standards to harden net-zero claims.
The report, released at the COP27 climate conference in Egypt, is intended to draw a “red line” around false claims of progress in the fight against global warming that can confuse consumers, investors and policy makers.
At last year’s climate negotiations in Glasgow, U.N. Secretary-General Antonio Guterres appointed 17 experts to review the integrity of non-state net-zero commitments amid concerns about “a surplus of confusion and deficit of credibility” around corporate climate claims.
“Too many of these net-zero pledges are little more than empty slogans and hype”, group chair and Canada’s former environment minister, Catherine McKenna, said during a news conference launching the report.
“Bogus net-zero claims drive up the cost that ultimately everyone will pay,” she said.
Regulators across the world are starting to set tougher rules around what activities can be deemed environmentally friendly, yet progress is patchy and campaigners and activists are increasingly turning to the courts to challenge weak claims.
On Tuesday, an official at Australia’s corporate watchdog said it was investigating several companies over greenwashing, in which a company or group makes exaggerated claims over the environmental impact of their products or practices.
Last month, meanwhile, Britain’s financial watchdog proposed new rules from 2024 for funds and their managers to prevent consumers being misled about their climate credentials.
An estimated 80% of global emissions are now covered by pledges that commit to reaching net-zero emissions.
The report set out a list of recommendations that companies and other non-state actors should follow to ensure their claims are credible. For example, a company cannot claim to be net-zero if it continues to build or invest in new fossil fuel infrastructure or deforestation.
The report also dismisses the use of cheap carbon credits to offset continued emissions as a viable net-zero strategy, and recommends companies, financial institutions, cities and regions focus on outright emissions and not carbon intensity – a measure of how much carbon is emitted per unit of output.
The report was “potentially very significant, depending on the traction it gets”, said Eric Christian Pedersen, head of responsible investments at Nordea Asset Management.
“If this report becomes a legal standard against which one can measure if a net-zero commitment is bona fide or not, then it… can provide ammunition for the lawsuits and regulatory action which are sorely needed to make the absence of climate action more expensive at the individual company level.”
The report “gives companies, investors, cities, regions – and by implication, countries – a clear statement of what ‘good’ looks like”, said Thomas Hale, a global public policy researcher at Oxford University and co-leader of the Net Zero Tracker project which measures the effectiveness of such pledges.
“We need to be clear that most net-zero targets are not on track,” he told Reuters, noting the tracker found that only half of companies with pledges have robust plans.
Teresa Anderson, global lead for climate justice at poverty-eradication non-profit ActionAid International, said corporations had “long hidden behind net-zero announcements and carbon offsetting initiatives, with very little intention of really doing the hard work of transforming and cutting emissions.”
“These recommendations will aim to keep them in line and close any loopholes.”
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