Yesterday, a major new report emerged that sought to question the credibility of many leading corporate net zero targets. Such reports are both increasingly frequent and broadly welcome. If net zero strategies are to be of any use it is vital they are constantly scrutinised and any risks of ‘greenwash’ are assiduously policed.
But this report from the NewClimate Institute and Carbon Market Watch hit particularly hard. It accused the net zero targets from many of the world’s most climate-committed multinationals of having ‘low integrity’, routinely failing to cover their value chain emissions, and being overly reliant on highly questionable carbon offsets. Moreover, it questioned the effectiveness of the Science Based Targets initiative (SBTi), which has played a central role in independently validating many corporate climate targets.
For businesses that have invested literally billions of dollars and considerable political capital and operational bandwidth in their decarbonisation plans, the criticism must have smarted.
As Cecilia Keating reports today in a must read deep dive on the report’s central allegations and the response from the SBTi and others, there is still a consensus that critiques of net zero targets are welcome and necessary. But there is also a growing sense that tarring any and all corporate climate strategies as “greenwash” on the grounds that they are not all-encompassing and do not immediately deliver deep decarbonisation can become an unfair and potentially counter productive gambit. As We Mean Business’ Maria Mendiluce noted, we are all on a “steep learning curve here… business would love to have very clear guidance, but we are making it and improving it as we go”.
The methodology used by the Corporate Climate Responsibility Monitor – which is set to be updated regularly – raises three main concerns with current corporate climate strategies, alleging that they routinely fail to adequately cover value chain emissions, are overly reliant on carbon offsets, and can set questionable baselines that make targets easier to meet.
Such concerns are valid and widely shared in some quarters, but what critics of corporate climate action tend to gloss over is that efforts are constantly underway to strengthen and improve net zero strategies.
The primary case in point is the SBTi’s release last year of a new Net Zero Standard which requires companies to set ambitious near term decarbonisation targets and places strict limits on the use of offsets. More broadly, tracking and managing value chain emissions is a hugely complex undertaking beset by risks of double counting and raising important questions about sovereignty and precisely who should be responsible for any given ton of CO2. Companies should take steps to tackle their value chain emissions, but it is wrong to imply a corporate climate strategy is a void of integrity if it lacks an immediate plan for fully decarbonising something as complex as a global supply chain.
What this row comes back to is the long-running debate over the validity and effectiveness of net zero targets. This is a vital debate where scrutiny of net zero targets is to be welcomed. There are undoubtedly bad faith actors in every industry that wish to game net zero targets so as to enable them to continue their reliance on fossil fuels and polluting business models. It is vital that such actors are identified and called out.
But it is also crucial not to confuse them with the many good faith actors who are genuinely striving to deliver an unprecedented economic and technological transition to net zero emissions and are understandably finding that it is a hugely difficult undertaking that will involve some inevitable missteps along the way. Net zero strategies have not yet delivered on their era-defining goals, but frankly it would be bizarre if they had at such an early stage in this transition. Billions of dollars is now being invested to try and bolster the credibility of these plans. As Mendiluce argues, businesses and campaigners would be wise to ensure the perfect does not become the energy of the good