Country-level pledges to reach net-zero greenhouse gas emissions boomed during the lead-up to the United Nations’ 2021 climate change conference in Glasgow, Scotland, and now cover more than 90 percent of global GDP. But reaching these targets will require emissions cuts from all of those countries’ cities, states, regions, and companies — and researchers say too few have gotten on board the net-zero train.
A report released Monday by Net Zero Tracker, a collaboration among four environmental nonprofits and research organizations, shows that a concerning number of subnational governments — as well as 40 percent of the world’s largest companies — lack a net-zero target, raising questions about national governments’ ability to drive down climate pollution. Of the subnational governments and companies that do have a target, not even 5 percent meet minimum procedural requirements for credibility, including, for example, covering greenhouse gas emissions associated with the products businesses sell to consumers.
“We aren’t seeing any improvement whatsoever on the integrity side,” said John Lang, Net Zero Tracker’s project lead. As national governments prepare to conclude a two-year evaluation of their progress toward the goals of the 2015 Paris Agreement, Lang said they must do more to operationalize their lofty climate commitments.
“The ball is in the countries’ courts,” he said. “We need regulation.”
Monday’s publication, “Net Zero Stocktake 2023,” is the third installment of Net Zero Tracker’s annual report on the quantity and quality of global carbon neutrality targets. Since last year, the organization has documented a 25 percent increase in the number of entities with a net-zero target, mostly in the private sector. Currently, 929 of the world’s largest 2,000 publicly-listed companies are pledging to reach net-zero emissions, up from 702 last year. Many more countries have also codified their existing climate pledges in policy documents or domestic legislation.
Despite that progress, however, there is still a huge gap between countries’ intent and reliable action plans from the polluting entities that operate within their boundaries. The report finds that about half of people who live in large cities are not covered by a municipal greenhouse gas reduction target. Some 41 percent of states and regions in the world’s 25 highest-emitting countries and 37 percent of the largest global companies by annual revenue lack any plan to mitigate climate pollution. The health care, infrastructure, and retail sectors have the lowest rates of adoption. The health care, infrastructure, and retail sectors have some of the lowest rates of adoption.
“These entities are dangerously out of sync with economic trends and globally agreed goals,” the report says.
Meanwhile, most of the subnational net-zero targets that are out there remain misaligned with internationally agreed-upon criteria for credibility. Of the 397 net-zero pledges from cities, states, and regions that Net Zero Tracker looked at, only 3 percent meet basic requirements laid out by the U.N.’s “Race to Zero” campaign, a voluntary coalition of entities with net-zero pledges. These requirements include steps like setting interim greenhouse gas reduction goals and publishing annual progress reports. Meanwhile, 4 percent of publicly-traded companies with pledges meet those standards.
This lack of integrity is nothing new; over the past several years, net-zero targets have repeatedly been criticized as “misleading,” if not worse. Last year, U.N. Secretary-General António Guterres called fossil fuel companies’ net-zero pledges “rank deception,” since they obscure industry plans to expand oil and gas exploration. A report published in February found that net-zero pledges from 24 of the world’s largest self-proclaimed green companies only covered 36 percent of their cumulative greenhouse gas emissions. Many of them used unreliable carbon offsets to ostensibly neutralize a portion of their emissions, while others exempted huge swaths of their supply chain emissions from their targets.
This is still the case today: Net Zero Tracker documents “little progress” on the quality of net-zero pledges since 2022, calling most fossil fuel companies’ pledges “largely meaningless” because of their failure to account for so-called Scope 3 emissions — those associated with burning the fossil fuels they sell. The group’s report also notes some concerning new trends, including growing interest in so-called “insetting,” in which polluters invest in carbon dioxide removal within their supply chain, usually without third-party review or certification. (For example, a company could buy a piece of land, plant trees there to claim — without accreditation — it has sequestered carbon dioxide, and then sell the land in 20 years to a developer.)
While this misalignment may have been more understandable in the past, when there was less clarity about what should go into a reliable carbon neutrality plan, Net Zero Tracker says this is no longer the case. Over just the past year, new guidance from groups like the International Organization for Standardization, the Science-Based Targets Initiative, and the NewClimate Institute, as well as the Race to Zero campaign and a separate U.N. panel, have more or less converged on a common set of principles for what Net Zero Tracker calls a “good” net-zero commitment. Although the organizations differ on some specifics — including whether and how to permit carbon offsets — they all broadly agree that pledges should cover all emissions, including those in supply chains; include interim emissions targets; and align with science-based guidelines to cap global warming at 1.5 degrees Celsius (2.7 degrees Fahrenheit). It is notable that, for the first time, all five of these groups now require a fossil fuel phaseout as part of a trustworthy net-zero pledge.
Moving forward, environmental advocates say it will be crucial that countries substantiate their net-zero pledges with supportive commitments from more cities, states, and companies, and that they develop a robust regulatory framework to ensure those commitments are credible. Governments have a chance to do that now, in the lead-up to and during this fall’s annual U.N. climate conference in the United Arab Emirates. There, countries will conclude the first “global stocktake” to determine whether they’re on track to meet international climate targets — and, if not, how to right the course.
“No company, city or region can any longer claim not to know what a credible target looks like,” Alexis McGivern, net-zero standards manager for the research initiative Oxford Net Zero, said in a statement. “Using the good practice and areas of consensus within the accountability ecosystem, policymakers now have the tools to shape regulation to create a level playing field enabling companies to accelerate down the pathways to net-zero.”
