At COP27, the <a href="https://www.un.org/en/climatechange/high-level-expert-group" target="_blank" rel="noreferrer noopener">UN High-Level Expert Group</a> (HLEG) delivered its <a href="https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf" target="_blank" rel="noreferrer noopener">Integrity Matters</a> report on the net zero commitments of non-state entities. Commissioned by UN Secretary-General António Guterres to tackle greenwashing, the 10 recommendations clarify — in detail — what companies, investors, regions and cities should consider when setting and implementing their net zero targets. 
Here, Net Zero Tracker project lead John Lang presents the guidelines visually so they can become accessible to as wide an audience as possible.

HLEG explainer 07 12 22

The 10 recommendations build on science and existing credibility frameworks in voluntary efforts to crystalise what is now a clear set of best practices on net zero. For more information on the recommendations (and the five principles that accompanied them) see the <a href="https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf" target="_blank" rel="noreferrer noopener">full report</a>. 
To coincide with the report’s launch, we provided a snapshot <a href="https://zerotracker.net/analysis/recommendations-and-current-realities">Recommendations and Current Realities</a> showing the gaps that entities must fill to drive net zero efforts in the right direction and bend the curve of emissions downwards.
The above is the first of many explainers John will create so net zero policy, science and best practice can become more accessible to a broader audience.
If you would like to use the above for yourself (or your classroom), please drop him a note over <a href="mailto:john.lang@eciu.net" target="_blank" rel="noreferrer noopener">email</a> or <a href="https://twitter.com/johnlangab" target="_blank" rel="noreferrer noopener">Twitter</a>. He can provide them in various formats.
 SOURCES


<a href="https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf">Integrity Matters: Net zero commitments by businesses, financial institutions, cities and regions</a>, UN High‑Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities (HLEG), 2022
<a href="https://www.ipcc.ch/report/sixth-assessment-report-working-group-3/">Climate Change 2022: Mitigation of Climate Change</a>, IPCC, 2022<a href="https://www.bsg.ox.ac.uk/sites/default/files/2021-11/2021-11%20Hale%20Net%20Zero%20Policy%20Memo.pdf" target="_blank" rel="noreferrer noopener"> </a>
<a href="https://www.bsg.ox.ac.uk/sites/default/files/2021-11/2021-11%20Hale%20Net%20Zero%20Policy%20Memo.pdf" target="_blank" rel="noreferrer noopener">Governing Net Zero: The Conveyor Belt</a>, Professor Thomas Hale, 2021
<a href="https://www.iea.org/reports/net-zero-by-2050" target="_blank" rel="noreferrer noopener">Net Zero by 2050: A Roadmap for the Global Energy Sector</a>, IEA, 2021

An infographic explainer of the UN High Level Expert Group's recommendations on the net zero commitments of companies, regions, cities and financial institutions.

Infographic: Net Zero Guidelines for Non-State Entities

By Angel Hsu, PhD: Assistant Professor of Public Policy and the Environment at the University of North Carolina.
Covering only three per cent of earth’s land surface, cities account for more than 70 per cent of global carbon dioxide emissions. Urban areas are the modern fossil fuel economy’s central hubs, meaning that cities must assume the leading role in global decarbonisation efforts.
The Paris Agreement in 2015 was the first international climate agreement to formally recognise the role that cities and private actors (collectively, frequently referred to as “non-state actors”) play in reducing emissions beyond national commitments. Subnational actors have, over the past decade, put forward net-zero targets in greater and greater numbers to align with scientific and global policy goals calling for decarbonisation by mid-century. 
Since December 2020, the number of net-zero committed cities with populations of at least 500,000 people has doubled. In total, more than 1,000 cities of all sizes and geographies have pledged to achieve net zero emissions. 
City-level, net-zero targets 
Well-designed and ambitious city-level, net-zero targets are crucially important for reducing global carbon dioxide emissions to net-zero by 2050, which is necessary to meet the Paris Agreement’s target of limiting warming to 1.5°C. These targets encourage collaboration across supply chains and between stakeholders from the government and general public. Yet given the imperative of immediate, substantial climate action, the question persists: how can we ensure that cities deliver on their targets in the coming decades? 

As more and more cities set net-zero goals, it is chiefly important to ensure that these municipalities start on the right path with clear plans that detail how they intend to meet their goals. An array of issues obscures our understanding of the effectiveness of city targets. From the outset, the distinct characteristics and decarbonisation strategies of different cities’ plans make it difficult to conduct a meaningful systematic analysis of targets. Some actors make net-zero pledges with absent or vague emission reduction targets, or they neglect to include key emission sources relevant to their climate footprints.
Compounding these issues, targets often differ in their breadth and scopes. For example, of the largest 200 cities that publish net-zero targets, less than 17 per cent measure out of boundary or Scope 3 emissions, which can comprise more than two-thirds of a city’s carbon footprint. This gap is critical because as cities work to reduce their own emissions, they risk outsourcing emissions from their own consumption to other areas, which would not result in an overall reduction in emissions.

These problems fuel concern among many groups – from private citizens to international authorities – about whether ambitious net-zero targets will translate into real emissions reductions overall.
What can machine learning teach us about city targets?


By systematically evaluating city plans pledging net-zero targets, we are able to uncover themes and terms associated with credible climate action. This type of evaluation is a necessary first step in distinguishing targets that will actually deliver on their net-zero ambitions from those that are merely words, aka greenwashing. 
We recently used natural language processing (NLP) techniques to examine climate action documents from 318 cities with net-zero targets and found that specific textual patterns can be predictive of ambitious net-zero targets. We also identified common patterns and trade-offs evident in cities’ climate action themes using a replicable, scalable approach that can pave the way for cross-city learning.
Four indicators of effective, economy-wide, city net-zero targets 
We found that cities that have set economy-wide, net-zero targets – a hallmark of an ambitious net-zero goal, compared to others that merely aim to reduce emissions in a particular sector such as buildings or transport – have significantly different language use patterns in their climate actions than cities lacking these targets. There are four top predictors of ambitious net-zero city pledges. 
<ol><li>Detail underpins integrity. Ambitious plans tend to include specific metrics regarding the scale, scope, and sectoral focus of planned emissions reductions. These cities tend to be more comprehensive in their strategies as well, including out-of-boundary or Scope 3 emissions in their plans. In general, leading cities with net-zero targets, such as Seattle, Vancouver, and London, present consumption-based emissions inventories. Considering consumption-based emissions – indirect GHG emissions generated from city residents’ consumption of goods and services like food, clothing, or electronics – is increasingly considered a necessary component of a credible net-zero target.</li><li> Zeroing in on emission reduction sources. Effective climate action plans tend to detail the specific intended sources of their emission reductions. For instance, many documents focus on building-related energy emissions, referencing actions such as transitioning away from gas boilers or increasing the use of combined heat and power systems. This reflects a predominant focus on the energy sector across the climate action plans of all 318 analysed cities. Since energy-related emissions from stationary energy sources (for example, fuel combustion and electricity use in residential, municipal, or commercial buildings) comprise the majority of most cities’ greenhouse gas emissions, it is unsurprising that the energy-related climate actions are so common. However, this emphasis may have trade-offs, including distracting from important emissions reduction opportunities in the realm of Scope 3 emissions.</li><li>Governance mechanisms to implement climate actions. Across all examined climate action documents, use of the phrase “mayor” is the strongest single word predictor of whether a city has pledged a net-zero target. Typically, this usage is related to an explicit show of government buy-in, such as a foreword or official statement by leading government officials. In addition to this government involvement, ambitious plans often include descriptions of how the city’s energy use fits into regional or national energy optimisation plans. For instance, Oslo’s Mayor has backed the city’s annual climate budget, an innovative governance model for integrating emissions into city budgeting decision-making.</li><li>Human-centric approaches. High-achieving cities discuss the role that local communities can play in implementing climate plans. Furthermore, they consider opportunities to improve residents’ quality of life and promote inclusive economic activities. Ultimately, the core focus here is on engaging with urban residents to advocate for needed changes rather than on enacting high-level mandates.</li></ol><div> </div>
Understanding urban climate action plans
These key findings demonstrate that mining cities’ climate policy documents can help us to better understand common strategies and trade-offs in cities’ climate action plans. Overall, two overarching common characteristics across ambitious climate action plans are specificity and governance. Compared with country-level targets which are scrutinised at the international level by mechanisms such as the Paris Agreement – city-level targets have been subject to less regulation. Copenhagen, for example, recently announced it would not meet its pledged 2025 net-zero goal. Additionally, net-zero as a concept is less intrinsically embedded in the local landscape of city governance, especially in the Global South. 
For cities to achieve their full potential in the global race to net-zero emissions, increased accountability, transparency, and ambition are necessary in urban climate action documents. Critical analysis of these plans using natural language processing techniques can help us achieve these results by fostering cross-city learning through improved understandings of common decarbonisation strategies and trade-offs. 
Angel Hsu, PhD, is an assistant professor of public policy and the environment at the University of North Carolina at Chapel Hill and the director of the Data-Driven EnviroLab. Hsu co-leads the Net Zero Tracker, the world’s only open-source independent review of the quantity and quality of net zero targets, across countries, regions, cities and companies. Ian French is a 2022 Environmental Studies graduate of Yale-NUS College in Singapore. 
 This article first appeared on <a href="https://www.smartcitiesworld.net/opinions/how-ai-can-help-cities-get-to-net-zero">Smart Cities World </a>on 15th February 2023.

How large-scale text analysis could improve net zero climate action plans and supercharge cities’ decarbonisation efforts.

How AI can help cities get to net-zero

By Net Zero Tracker co-lead, Dr Steve Smith, Executive Director of Oxford Net Zero and CO2RE, University of Oxford
The importance of net zero emissions became clear to scientists Myles Allen and Dave Frame on a train to Exeter. The year was 2005. Tony Blair, the UK Prime Minister at the time, had convened scientists for a conference in Exeter to ask what constitutes “dangerous climate change.” Allen and Frame were preparing their presentation and looking at results from climate models on a laptop.
Up until that time the climate problem was almost universally framed in terms of the number of greenhouse gas molecules in the atmosphere. The first climate agreement, reached by governments under the United Nations back in 1992, had as its overarching aim the “stabilisation of greenhouse gas concentrations in the atmosphere that would prevent dangerous anthropogenic interference with the climate system.” For decades before that, scientists had been studying how much Earth’s temperature would change if CO2 concentrations were suddenly doubled and then held constant.
As climate models developed, they incorporated more of Earth’s complexity. This led to more understanding but not necessarily less uncertainty. Not only did a range of warming possibilities emerge for a given concentration, but also a range of concentration outcomes for a given path of emissions.
By the 2000s, a troubling finding had emerged: it was remarkably hard to put an upper limit on how much the world will eventually warm for a fixed level of greenhouse gas concentrations. Climate models, as well as the record of observed warming, could not rule out that temperatures would keep creeping up over time.
But as scientists grappled with this uncertainty, they also questioned its relevance. It would be an odd future in which humanity held concentrations fixed indefinitely while the world warmed inexorably. If temperatures kept climbing, would our descendants not dial down emissions more, or even develop ways to remove CO2 from the air?
What Allen and Frame discovered on the train – and<a href="http://dx.doi.org/10.1038/nature08019"> published in the journal Nature</a> in 2008 – was a better way to think about the problem. Rather than focussing on CO2 concentrations and final temperature, they found a much clearer link between CO2 emissions and peak temperature.
It just so happens that the timescales over which global temperatures rise in response to increased concentrations are very similar to the timescales over which the global carbon cycle draws down CO2 from the atmosphere. As a result, if CO2 emissions go to roughly zero, the two processes balance each other out: global average temperature will rest where it is at that time, neither rising nor falling further. 
Essentially, every additional tonne of CO2 put into the atmosphere by human activity will raise the maximum warming the world will reach. And, by extension, any limit to that warming – whether 1.5°C, 2°C, 4°C or 1°C – requires a limit to the total amount of CO2 emitted. A global carbon budget, after which point CO2 emissions must be “net zero”.
Like many scientific discoveries, a<a href="https://doi.org/10.1029/2007GL032388"> few</a><a href="https://doi.org/10.1073/pnas.0812721106"> other</a><a href="https://doi.org/10.1038/nature08047"> researchers</a><a href="https://doi.org/10.1073/pnas.0504755102"> were</a><a href="https://doi.org/10.1007/s10584-005-1146-9"> already</a> pulling together threads of the concept. But after the paper in Nature, net zero went very rapidly from scientific finding to headline<a href="https://www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf"> IPCC conclusion</a>, to<a href="https://unfccc.int/sites/default/files/english_paris_agreement.pdf"> Paris Agreement</a>, to<a href="https://ca1-nzt.edcdn.com/@storage/Net-Zero-Stocktake-Report-2022.pdf"> mainstream climate target</a>, all within little more than a decade.

NZ Timeline Timeline

Net zero is now seen as an organisational imperative: nations, regions, cities, companies, even fossil fuel companies have committed. Taking stock of this shift, some of the scientists involved have recently reflected on the<a href="https://www.annualreviews.org/doi/abs/10.1146/annurev-environ-112320-105050"> scientific origins of net zero and its implications</a>. Here are five principles for operationalising net zero pledges which flow from the science:
1. Cut faster
First, the most important factor determining peak global temperature is total CO2 emissions over time. While this means net zero CO2 is a necessary point to reach in order to halt the temperature rise, it also means the path to get there is crucial. In particular, the faster emissions are cut now, the smaller the total emissions, and the lower the peak warming. This is why it is so important that <a href="https://www.unep.org/resources/emissions-gap-report-2022">countries increase their pledges and actions to 2030</a>, and that <a href="https://zerotracker.net/analysis/recommendations-and-current-realities">others set interim targets</a>, in addition to their longer-term commitment to net zero.
2. In the mix
Second, the net zero concept was developed for CO2 emissions specifically. There are many other greenhouse gases, and<a href="https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Headline_Statements.pdf"> scientists agree</a> they will need strong reductions to keep temperature in check. But for gases such as methane, more potent but shorter-lived than CO2, global temperature is determined more by the rate of emissions decline rather than the total over time. Climate action definitely should deal comprehensively with all planet-warming emissions. If that means your net zero target is for all gases and not just CO2, then it should involve CO2 specifically going to at least net zero.
3. Keep it real
Third, net zero means that any remaining emissions at a given point in time are balanced by an equal amount of removals from the atmosphere. This is often not how net zero is applied at the national or corporate level. Net zero targets usually include the possibility of buying offset credits to balance emissions.<a href="https://www.carbon-direct.com/insights/assessing-the-state-of-the-voluntary-carbon-market-in-2022"> Over 87%</a> of current offsets available for regular customers to buy are not actually removals – they come from other emission reduction projects. Emissions do need to come down, so high-quality emission reduction offsets can have a place. But if offsetting is to play a role in reaching real net zero, it will have to<a href="https://www.smithschool.ox.ac.uk/research/oxford-offsetting-principles"> ultimately come from removal projects</a>.
4. Stay down
Fourth, net zero needs to be permanent. When CO2 from fossil fuels is emitted into the air, global temperature stays raised for multiple millennia - effectively permanently on timescales relevant to human beings. That means net zero needs to be similarly durable. Any removal used to balance out residual emission needs to be permanent. This is crucial, because it is all too easy to imagine fossil fuel emitters claiming net zero based on non-removal offsets, or tree-planting projects (which can<a href="https://www.ft.com/content/3f89c759-eb9a-4dfb-b768-d4af1ec5aa23"> literally go up in smoke</a> without replacement), or leaky underground carbon storage (if not managed properly). If net zero isn’t sustained over many decades, it won’t be enough.
5. Go global
Last but not least, what ultimately matters to the climate is the sum total of global action. Even more than net-zero organisations, we need organisations enabling a net-zero world. Individual-level net zero targets may be great motivators for action, and global net zero will require pretty much every activity to be 100% emission-free. But we need to avoid the<a href="https://en.wikipedia.org/wiki/Fallacy_of_division"> fallacy of division</a>. Some will actually need to go beyond net zero, like <a href="https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030/">Microsoft intends to</a>. And perhaps, for some activities which are genuinely hard to go 100% emission-free, it may be better to be as ambitious as possible than to claim net zero on the basis of dodgy accounting.
Net zero targets are not without controversy. Much attention – all the way up to<a href="https://www.un.org/en/climatechange/high-level-expert-group"> the top of the United Nations</a> – is now focussed on improving their integrity. The scientific origins of net zero point clearly to the importance of cutting emissions across the board now, complemented by the scaling up of durable carbon removal. While the science of net zero is firmly in, the delivery of net zero is firmly not. From scientific beginnings, the net zero train now needs to go from intent through integrity to implementation. We’re tracking the journey.

This article first appeared on <a href="https://www.edie.net/five-scientific-principles-for-operationalising-net-zero-pledges/">Edie.net</a> on 8th December 2022.

Five scientific principles for operationalising net zero pledges

Net Zero: Origins and Delivery

By Net Zero Tracker co-lead, Richard Black, senior associate, the Energy &amp; Climate Intelligence Unit What does ‘net zero emissions’ really mean in a world that features net zero gas trades, barrels of oil and even tar sands?
To some, their existence is proof that the net zero concept is entirely greenwash: countries, states, cities and especially companies pledging the Moon while actually planning to trash the Earth by continuing to produce and burn fossil fuel like there is no liveable tomorrow. 
And there are some net zero targets that absolutely merit that description. But if that is all there is to net zero, then why did scientists, campaigners and the world’s most vulnerable countries spend years planning to get it into the Paris Agreement? It has to mean something worthwhile – right?
The key issue is that until now, there has been no single standard against which a net zero pledge can be assessed; no gold-standard badge of quality. Scientists and campaign groups have published many formulations but of course no-one is obliged to use them. And if companies want to gain some kind of accreditation when there is no accepted universal standard for entities’ net zero pledges, there is also no standard for organisations that assess those pledges, potentially creating a ‘race to the bottom’ in accreditation.
As of last week, all of this changed with the publication of a new set of standards from the United Nations. <a href="https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf">The report of the UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities</a>, commissioned by UN Secretary-General António Guterres and chaired by former Canadian Environment Minister Catherine McKenna, sets out in painstaking detail what a credible net zero target should look like. 
It must cut emissions consistent with a scientifically validated pathway to the Paris Agreement’s 1.5 Celsius global warming limit, which necessarily includes steep emission cuts this decade. The entity must publish a plan, commit to reporting progress annually to the UN climate convention, and align activities such as lobbying and capital expenditure to its net zero target. The target must cover all elements of the entity’s value chain; it must abstain from fossil fuel expansion, and can use only the highest-quality offsets under strictly specified conditions. There is a lot more detail in the panel’s 10 recommendations, much of it aimed at ensuring a socially progressive and ecologically sound transition.
In endorsing the panel’s recommendations, Mr Guterres did not mince words. While all net zero pledges by non-state entities were welcome, he described them as having <a href="https://www.un.org/sg/en/content/sg/statement/2022-11-08/secretary-generals-remarks-launch-of-report-of-high-level-expert-group-net-zero-commitments-delivered">‘varying levels of rigour, and loopholes wide enough to drive a diesel truck through… We must have zero tolerance for net-zero greenwashing.’</a>
There is no doubt that raising all net zero pledges to these standards of integrity will be testing even for wealthy corporates that are serious about their commitments. Many, I suspect, will not have even considered some of the factors raised by the panel. Certainly, a quick analysis by the Net Zero Tracker team after the Panel’s report shows that <a href="https://zerotracker.net/analysis/recommendations-and-current-realities">very few entities, whether states, cities or companies, come close to meeting even a selection of the criteria</a>: I would be prepared to wager that as of now, not a single one meets them all.
But herein lies the importance of the exercise: this is now the standard against which all net zero pledges will come to be judged. It is also therefore a vaccination against low-standard accreditation, because this is also now the standard that accreditors will have to use if they wish to be credible. The <a href="http://www.zerotracker.net">Net Zero Tracker</a> will be monitoring the biggest entities to see how quickly they are stepping up to the bar. 
There are also implications for governments. As the recommendations make clear, governments can help companies through enacting firm, intelligent regulations. Reporting standards, offset commitments and lobbying activities are three areas where regulation can drive standards up. 
The other implication for governments is that their own net zero pledges will inevitably be judged against the panel’s criteria, even though it explicitly considered non-state entities. Governments too will need to clarify and firm up their targets and abandon fossil fuel development if they want to meet the net zero gold standard.
For the Wild West of net zero, the big clean-up is coming. From now on, any entity aspiring to have its net zero target taken seriously is either going to have to start shaping up, or ship out. Netzerosville is under new management. 
This article first appeared on <a href="https://www.context.news/net-zero/opinion/net-zero-is-a-climate-wild-west-but-theres-a-new-law-in-town">Thomson Reuters Context</a> on November 15th 2023.

How the UN 'HLEG' net zero standards promise to raise integrity

Wild West of net zero: there’s a new law in town

If you were asked to pick just one obtuse corporation standing in the way of tackling the timed test of climate change, your brain might arrive at a Shell or a BP or another ‘charismatic company' that campaigners enjoy excoriating. 
Publicly-listed carbon majors are an important part of the picture, one complicated by state-owned giants like Gazprom and financial behemoths like BlackRock that control the purse strings of fossil fuel capital.
Yet in a blind spot off to the side, there exists a raft of firms that most people have never heard of — many of which have larger revenues than Facebook — that are quietly undermining the net zero transition through foot dragging and non-disclosure. The shady surroundings of private equity provide them with cover, no shareholders offer an alibi and fewer stakeholders give an excuse. That's right, we're talking about private companies. 
Like kids wagging class on their first day of school, they are unaccountable and unaccounted for. When a publicly-listed company sets (or doesn't set) a net zero target, they incur a degree of external accountability — from their investors, customers and civil society. In comparison, privately held companies get a freer, sometimes free, pass. The non-disclosure of emissions and non-alignment on net zero might be rational for one private student to lighten their ‘bureaucracy burden' — but it's irrational for the economy at large. 
<h3>Everybody's business</h3>
New analysis by the <a href="http://www.zerotracker.net/">Net Zero Tracker</a> reveals the deep chasm between private firms and their publicly-listed counterparts on the intent and integrity of their net zero targets. Over two-thirds of the world's 100 largest private firms, with revenues totalling nearly $3.1tr, are still operating without net zero targets. For the 100 publicly-listed companies the proportion is less than one-third — the vast bulk have already set net zero commitments and many have developed plans to deliver them. 
Of those private firms that have set a net zero target, only 13 per cent have published a plan to reach it, versus 73 per cent of publicly-listed companies. Private firms are also less likely to include value chain emissions within targets, set interim targets or provide clarity on their planned use of offsets. 
The situation is even more concerning in the context of other findings by the <a href="https://zerotracker.net/analysis/net-zero-stocktake-2022">Net Zero Tracker</a> and <a href="https://newclimate.org/resources/publications/corporate-climate-responsibility-monitor-2022">others</a>. Yes, corporate target-setting continues at a frenetic pace, but the targets of publicly-listed companies themselves lack robustness. Considered collectively, the net zero performance of major private companies is deficient compared against a benchmark that is itself chock-a-block with shortcomings.
One listed company's transition to net zero can be a private company's opportunity to double down. Despite the risks of playing hot potato with potentially stranded assets, since 2018, the Western world's biggest publicly-listed oil companies have shed $44bn of mostly fossil-fuel assets; with much more in the offing, <a href="https://www.economist.com/finance-and-economics/who-buys-the-dirty-energy-assets-public-companies-no-longer-want/21807594">according to Wood Mackenzie</a>. Many go into the hands of private firms.
A prominent example of ‘fossil-spinning' recently played out in the UK, where private giant INEOS <a href="https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-agrees-to-sell-its-petrochemicals-business-to-ineos.html">swallowed up BP's global petrochemical business</a> and <a href="https://www.ineos.com/news/ineos-group/ineos-energy-completes-the-acquisition-of-all-oil-and-gas-interests-from-hess-corporation-in-denmark/">acquired</a> Hess Corporation's oil and gas assets. INEOS, unlike many of its private peers, actually has a net zero target. As we found, however, even its target lacks credibility — for example, it does not cover its value chain emissions.
Unfortunately the firms exploiting the net zero blind spot happen to be the most heavy-emitting sectors: fossil fuels and heavy industry. Only 17 per cent of private firms in these sectors have set a net zero target, whereas 70 per cent of listed firms do. Alarmingly, we found that only one heavy-emitting private firm had a net zero plan.
<h3>Let there be light</h3>
Fortunately, we are not tugging back this curtain alone. <a href="https://ssrn.com/abstract=4065115">Researchers</a> have private firms in their sights, as do voluntary initiatives, especially those with a direct interest in private firms disclosing their footprints and transitioning to net zero. Last year CDP kicked off a <a href="https://www.cdp.net/en/articles/investor/investors-with-us23-trillion-of-assets-demand-standardized-environmental-data-from-private-companies">Private Markets Pilot</a> to help standardise reporting from, and benchmarking of, private firms, and SBTi launched its<a href="https://sciencebasedtargets.org/resources/files/SBTi-Private-Equity-Sector-Guidance.pdf"> Private Equity Sector Science-Based Target Guidance</a> to help guide those that bank roll them.
Regulators are cottoning on that we need to level the playing field. Policymakers in the <a href="https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en">EU</a> and the <a href="https://www.gov.uk/government/publications/academy-trust-financial-management-good-practice-guides/streamlined-energy-and-carbon-reporting">UK</a> recently mandated that, respectively, ‘large' and ‘very large' private companies disclose emissions and climate risks. Sunlight is often the best disinfectant because transparency begets scrutiny begets accountability. 
As the shadow of publicly-listed mandatory disclosure stretches across the global economy — it's going mainstream in China and India next year — those private firms that choose to wave as the net zero train leaves the station risk becoming stranded. 
John Lang is Net Zero Tracker lead at the Energy &amp; Climate Intelligence Unit.
This article first appeared in <a href="https://www.businessgreen.com/opinion/4059619/private-companies-net-zero-blind-spot-thats-everybodys-business">BusinessGreen</a> on 7th November 2022.

Privately-owned firms are quietly undermining the net zero transition through foot dragging and non-disclosure, writes the ECIU's John Lang.

Private companies: The net zero blind spot that's everybody's business

COP27 side event invite v2

Balancing net zero integrity and momentum

SS COP27 Invite

The Net Zero Tracker hosted a side event at COP27, Egypt, with members of the UN High Level Expert Group on Net Zero Commitments of Non State Entities (HLEG).

Balancing net zero integrity and momentum - COP27 side event

● Only 14% of the annual revenue of high-emitting private firms is covered by net zero targets, vs. 77% of annual revenues of listed firms in the same sector.

● Private companies' pledges are less likely to include interim targets, to cover all emission Scopes and to give clarity on use of offsets.

● All 10 of the largest publicly-listed companies in the world have a net zero target or similar, compared with none of the largest 10 private companies.

● Net Zero Tracker calls for a ‘whole economy’ climate disclosure system to enhance transparency and drive private action, and invites further research into this area.
Analysis reveals a chasm in corporate climate disclosure: private firms are less than half as likely to set climate targets compared with their publicly-owned counterparts that are listed on global stock exchanges. 
Under one-third (32%) of the world’s 100 largest private firms, with revenues totalling nearly $1.2 trillion, are operating with a carbon reduction target, compared with over two-thirds (69%) of the largest 100 publicly-listed companies (1). The study, ‘Everybody’s Business: The net zero blind spot’, compares the climate targets of the world’s largest 100 privately-owned companies with those set by the 100 largest publicly-traded companies.
John Lang, project lead of the Net Zero Tracker, which conducted the analysis, said:
“Private firms are falling devastatingly short on net zero compared with their publicly-listed cousins. As the shadow of disclosure regulation stretches across the whole economy, those private firms that choose to wave as the net zero train leaves the station risk becoming stranded.” Only 17% of high-emitting private firms have net zero targets, vs. 70% of publicly listed firms: Twenty nine out of the 100 largest private companies fall into sectors we consider high-emitting: Fossil Fuels (8); Infrastructure (6); Manufacturing (7) and Materials (8).
Amongst the high-emitting sectors, only 17% (5/29) private firms have set a net zero target, running counter to the publicly-listed landscape, where 70% (28/40) of firms have a net zero target. When investigating the annual revenues represented by the high-emitting sectors’ net zero targets, the following disparities emerge:
● By annual revenue, net zero targets cover just 14% ($221 billion / $1,556 billion) of aggregate annual revenue in these sectors. This compares with the 77% ($4,689 billion / $6,119 billion) of high emitting, publicly-listed companies that are covered by net zero targets. ● Only one of the high-emitting private firms, INEOS, has a published plan to deliver net zero and, even then, we consider this inadequate.
No fossil fuel firms in the top private 100 list has a net zero target: 
Another major disparity between listed &amp; private companies lies within the Fossil Fuels sector, where none of the private firms (8/8) have set a net zero target. This runs counter to the listed firms landscape, where 65% of publicly-listed Fossil Fuels companies are represented by a net zero target.
The scarcity of net zero targets and plans across high-emitting private firms expose them to transition risks and raises serious concerns about the economic vulnerability of countries where they are based. By annual revenue, the largest four high-emitting private companies without a net zero target are:
1. Trafigura Group, $231 billion USD annual revenues (Singapore) 2. Vitol Group, $140 billion USD annual revenues (Netherlands) 3. Koch industries, $115 billion USD annual revenues (US) 4. TATA Group, $113 billion USD annual revenues (India).
Richard Black, Senior Associate, Energy &amp; Climate Change Intelligence Unit (ECIU), said: 
“The biggest companies that you’ve never heard of - many of which have larger revenues than Facebook - are effectively undermining the net zero transition through non-disclosure and inaction.
“As major players in key commodities such as energy, food and manufacturing, private firms without net zero targets are stalling the progress of the entire business ecosystem, while hindering their own ability to shape the world's greatest megatrend.
“By opting out of net zero, private firms are missing the opportunity that many listed firms are now seizing upon - to turn climate risk into opportunity. As the largest private firms are ‘too big to fail’, their failure to adapt to the inevitable has major ramifications for economies.”
Major disparity on plans to deliver net zero in private firms’ targets, vs. listed 
Net Zero Tracker compared the level of integrity within the targets that have been set by 32% of non-listed and 70% of the largest listed firms, based on key indicators including reporting mechanisms, scopes of coverage and interim targets.
The starkest contrast between the two corporate groups is that only 13% (4) of private companies’ net zero targets have accompanying plans to deliver their pledges, vs. 73% (32) of the publicly-listed companies with net zero targets. Dr Steve Smith, Executive Director, Oxford Net Zero, said:
“Nearly nine out of 10 of the largest private firms’ net zero targets do not come with any plans. That suggests at best that these are shaky aspirations, and at worst that they are just greenwashing."
The following key disparities were also identified in the targets of private companies, vs. listed firms:
● Just 34% of private firms’ net zero pledges include an interim target, an important proxy for delivering short-term emission reductions and a marker of real intention to reach net zero. For comparison, 55% of publicly-listed company net zero pledges include interim emissions reduction targets. ● 53% of private firms' net zero targets include full or partial coverage of Scope 3 emissions (2) where most of a company’s value chain emissions typically occur, compared with 61% of publicly-listed companies. ● 69% of private companies do not specify whether or how they plan to use external offsets (carbon credits), compared with 51% of publicly-listed companies. ● This lack of transparency is an indicator of companies that have not ruled out the use of cheap, low quality credits.
Scope 3: Private firms need to shape up, or lose out on global supply chains
The direction of travel for publicly-listed companies towards increased mandatory disclosure and net zero transition requirements means that they will have no choice but to deal with their value chain (Scope 3) emissions. Private firms that form part of those value chains will need to either shape up or lose out. Moreover, companies that provide less emissions-intensive products or services will have an increasingly competitive advantage on the global market, due both to energy costs and the likely advent of carbon border price adjustments.
Dr. Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute said:
“Overall, the robustness of existing private sector pledges is lower than pledges made by publicly-listed companies. They do at least put these firms on a starting line. Once targets have been set, firms should face pressure to establish mechanisms of accountability and reporting.”
The United States is a major player in the private corporate landscape, but net zero targets for most companies based there are missing in action:
The Net Zero Tracker analysis also notes the parts of the world where private companies are most dominant, and the levels of net zero adoption within key regions. Of the largest private companies covered by the analysis, most firms operate from the following regions:
● 50% operate from the US yet only 20% of those companies have net zero targets, far less than the US-based publicly-listed firms, where 73% have a target. ● Of the 21 companies operating in the EU, 52% (11/21) have a net zero target. This compares with 88% (14/16) of the publicly-listed EU companies in this analysis that have a net zero target. ● Of the 16 private companies headquartered in China, only one (6%), Zheijiang Geely Holding Group, has a net zero target. This compares with 33% (5/15) of the publicly-listed Chinese companies in this analysis that have a target.
The limited adoption of targets in the US appears to be due to a lack of any climate-related disclosure requirements for private companies comparable to those recently established by the UK and EU (3). 
To increase transparency, the mandatory disclosure requirements for publicly-listed companies (including transparency measures, corporate governance, and direct regulation of business operations), should be extended to private companies. Thomas Hale, Professor at the Blavatnik School of Government, University of Oxford, said:
“With public firms increasingly facing mandatory climate disclosure, there is a risk that private firms will escape climate-related scrutiny, allowing them to compete unfairly with companies that are serious about net zero. Smart regulation is needed to create a level playing field and close a potentially enormous loophole in corporate climate action.” Carbon intensive assets going dark through ‘fossil-spinning’ The NZT study aligns with recent analysis on the lack of climate disclosure in private firms - including ‘Private Companies: The Missing Link on the Path to Net Zero’ by the Leibniz Institute for Financial Research and the University of Hamburg (4). 
The paper highlights a concerning recent phenomenon known as ‘fossil-spinning’, whereby public companies sell carbon intensive assets, (such as major fossil fuel plants) to players in private markets, leading to assets ‘going dark,’ outside of the scrutiny of public markets.
‘Missing Link’ paper co-author, Wolf-Georg Ringe, the University of Hamburg, said:
“There is an increasing concentration of economic value in private companies, and a sharp decline in public equity over the last 20 years.
“An institutional lack of disclosure in non-listed firms, means colossal emissions footprints are regularly disappearing off the radar of regulators. 
“This analysis should act as a warning sign to regulators and policymakers, that a vast proportion of corporate carbon emissions are slipping through the net.”

ENDS 
 
Footnotes: 
(1) The total annual revenue of the 100 largest public companies was $4.3 trillion. The 68 private companies without targets is $3.1 trillion USD.
(2) Scope 1: Covers sources and sinks directly managed by an entity; Scope 2: Covers indirect emissions from energy use; Scope 3: Covers all other indirect emissions across an entity’s value chain, upstream and downstream.
(3) EU: The Non-Financial Reporting Directive (NRFD), and UK: TCFD reporting for ‘very large private companies.’ 
(4) <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4065115">Private Companies: The Missing Link on The Path to Net Zero by Alperen Gözlügöl, Wolf-Georg Ringe :: SSRN</a> 
About the analysis:
Everybody’s Business - A Glimpse into the Net Zero Credentials of the World’s Largest Publicly-Listed and Private Firms, conducted by the Net Zero Tracker consortium, compares the decarbonisation targets of the world’s largest 100 privately-owned companies, with those set by the 100 largest publicly-owned companies, within the Forbes 2000.
The publicly listed companies were drawn from the existing Net Zero Tracker database; for the private companies, this Eqvista list was used to first identify the 100 largest. Then the Net Zero Tracker Codebook was applied to assess their credentials, using publicly-available documents for investigation.
About the Net Zero Tracker (NZT):
The Net Zero Tracker (NZT) is a global initiative led by the Energy &amp; Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute and Oxford Net Zero, that assesses global net zero targets to promote transparency and ambition. 
The Tracker is geared to review a complex array of 50,000 data points on 4,000 entities' net zero targets encompassing governments, regions, cities and corporations, using open-source documents and data to categorise net zero targets in a comparable way. 
The Tracker is geared to assess targets that, at the very least, include: a published plan; immediate emission-cutting measures; and an annual reporting mechanism. Net zero plans must depend primarily on genuine carbon-cutting rather than offsetting, and for businesses, strategies should include emissions generated by the use of their products and services (Scope 3 emissions). 
The NZT database provides the only open-source independent review of the quality of net zero targets across countries, regions, cities and companies. It is intended to be used in combination with deep-dive analyses of entities’ emissions reduction performance, for example, NewClimate Institute’s Climate Action Tracker and the Corporate Climate Responsibility Monitor.

Net Zero Tracker analysis shows just 32 of the world’s 100 largest private firms have  set net zero targets, compared with 69 of the world’s 100 largest publicly-listed  companies.

$3.1 trillion USD Net Zero Blind Spot Revealed

Richard Black is a Senior Associate for the <a href="https://eciu.net/">Energy &amp; Climate Intelligence Unit (ECIU</a>) and <a href="https://zerotracker.net/">The Net Zero Tracker</a>

Amidst the politicking that inevitably surrounds any leadership race, a handful of Conservative MPs have demanded a review of our commitment to achieve net zero greenhouse gas emissions by 2050.
These calls betray a fundamental misunderstanding of the wider benefits of decarbonisation to UK interests and the global momentum towards net zero. More than 130 countries now have net zero targets, covering 91 per cent of global GDP. They are joined by 115 state and regional governments, 235 cities and more than one-third of the world’s biggest publicly traded companies.
Britain was among the early adopters and is reaping the benefits through private sector investment in areas such as renewable energy and battery storage. Energy bills, sent skyrocketing by the Kremlin’s invasion of Ukraine, are lower than they would otherwise be thanks to renewables and energy efficiency, and more renewables investment will bring bills down further. Electric cars will be a game-changer for air quality, as well as providing cheaper motoring and reducing reliance on Russian oil.
Unsurprisingly, the UK public cares. Recent polling shows that deserting our net zero target could cost the Conservatives 1.3 million votes — with 46 per cent of respondents saying they would be less likely to vote for a party that scrapped net zero. In the mayoral elections at Tees Valley, Ben Houchen, who placed net zero jobs at the heart of his re-election campaign, saw his share of the vote rise from 52 per cent to 73 per cent.
With Britain and the rest of Europe sweltering in new extremes of heat, climate change has forced its way into the Conservative leadership process in the most dramatic way possible. Wildfires are devastating countries just half a continent away, in France and Spain. Climate change is reducing crop yields and the productivity of fisheries and the security of fresh water supplies. All of these have economic as well as social consequences.
So while reaching net zero has a big cost, this is absolutely dwarfed by the cost of not doing so. It is equally clear that keeping the cost of achieving it as low as possible entails having a clear plan, to provide investors with certainty and stimulate healthy competition to provide the goods and services needed. In mid July, for example, the UK’s largest ever renewables auction locked in 7GW of clean power for 12 million homes by 2026 — at a cost of £45 per megawatt hour, a quarter of the current price for gas power.
The value of a clear, evidence-based roadmap is being appreciated more broadly, according to the most recent analysis from the Net Zero Tracker consortium. Over the last 18 months, the number of cities with net zero targets has doubled; the number of states and regions with targets rose by over 50 per cent. One-third of the world’s biggest publicly traded companies now have net zero targets, up from one-fifth at the end of 2020. More and more of these entities are also introducing plans and timetables to ensure the targets are delivered.
Even without Russia’s invasion of Ukraine, net zero would clearly be the logical path for the UK economy. As former Conservative MP Laura Sandys observed last month, the advantages of building out wind, solar, electric vehicles and battery storage are so clear, and the appetite of private capital so big, that moving towards net zero is simply a logical policy for the 21st century. Putin’s aggression has made it the must-have for geopolitical reasons as well – because the cost of not achieving net zero is continued reliance on international markets for energy.
So, even though Conservative leadership candidates might want to focus elsewhere to please specific wings of their party, there is no case in economics, business or politics for the UK squandering its leadership of the race to clean energy. For energy security, low bills, jobs and “Global Britain,” net zero is the only game in town.
___
This article was first <a href="https://www.cityam.com/ditching-net-zero-colossal-act-self-harm-for-economy-and-global-vision/" target="_blank" rel="noreferrer noopener">published in CityAM (UK)</a> on 2nd August 2022.

Calls to review the UK's net zero target betray a fundamental misunderstanding of the wider benefits of decarbonisation, writes Richard Black.

Ditching net zero would be a colossal act of self-harm

Richard Black, Senior Associate, <a href="https://eciu.net/">Energy &amp; Climate Intelligence Unit (ECIU</a>) &amp; co-lead <a href="https://zerotracker.net/">The Net Zero Tracker</a>

Sports coaches call it ‘the Big Mo’ and they cannot get enough of it. Physicists know that an object that has it theoretically keeps it forever, unless it runs into something else. And politicians? In politics, it is so cherished that some even name their movements after it. 
In climate change, too, momentum is everything. <a href="https://bcf.princeton.edu/events/williamnordhaus/" target="_blank" rel="noreferrer noopener">Climate economist William Nordhaus observed</a> that the problem with trying to get all countries to cut their emissions faster is that from a short-term economic standpoint, nations are effectively incentivised to ‘free ride’ on the efforts of others rather than moving first. However: if there is momentum in pledges of climate action, the problem largely disappears. If a government can see others are acting, it is more likely to front up itself – still more so if it sees those that chose early action garnering rewards, perhaps at the ballot box. 
This is not only true for governments. Within each sector of the economy, companies vie for a market share using whatever levers they can. If being seen to be ambitious on climate change gets your brand noticed, others will not only follow but strive to get out ahead, just as an athlete does not aim just to draw level with the front-runner but to kick on and establish a lead.

Big mo

This year, the consequences of not addressing climate change have been laid out more starkly than ever before. In February the Intergovernmental Panel on Climate Change (IPCC) published <a href="https://www.ipcc.ch/report/ar6/wg2/">a coruscating assessment</a> of impacts to date and projected for the future. Half of the world’s population live in places vulnerable to climate change. In every region, it is increasing rates of death and illness through extreme heat and other manifestations. Europe is frying in record-high temperatures, with Portugal, France, Spain and Turkey suffering devastating wildfires. Climate impacts are reducing crop yields, the productivity of fisheries and the security of fresh water supplies. For example, The European Commission’s 2022 soft-wheat crop estimate is down five million tons from a prior estimate. Plus, much worse is to come; and increasingly, impacts will outstrip the capacity of humans and nature to adapt.
Despite signing off the IPCC report (thus agreeing with its conclusions), governments have not leapt into emission-cutting action. True, many are grappling with issues such as insecurity, high food prices and intermittent energy supplies driven by the Russian invasion of Ukraine, and with the tailwinds of the Covid-19 pandemic. But climate change did not stop as these crises took hold. Last November, at the UN climate summit in Glasgow, governments agreed that <a href="https://unfccc.int/sites/default/files/resource/cma2021_10_add1_adv.pdf" target="_blank" rel="noreferrer noopener">their existing pledges were not enough and needed strengthening this year</a>. But <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/18/chairs-summary-of-the-major-economies-forum-on-energy-and-climate-held-by-president-joe-biden/" target="_blank" rel="noreferrer noopener">only a handful have vowed</a> to submit new Nationally Determined Contributions (NDCs, the pledges countries make via the UN climate convention) this year; only one, Australia, <a href="https://www.industry.gov.au/news/australia-submits-new-emissions-target-to-unfccc" target="_blank" rel="noreferrer noopener">has actually done so</a>.
Somewhat extraordinarily the European Union is not intending to upgrade its NDC target even though it is speeding up measures such as renewables, energy efficiency and electric transport to cut fossil fuel use and undercut Putin’s war machine, and <a href="https://www.climatechangenews.com/2022/05/30/europe-should-use-its-putin-proofing-energy-plans-to-reinvigorate-climate-action/" target="_blank" rel="noreferrer noopener">would simply have to translate these into a new formal pledge</a>.
The inescapable conclusion is that following the back-slapping and optimistic noises at last year’s Glasgow summit, momentum has largely vanished. Whether the G7, G20 or any other international fora can get it back is, right now, a moot point. So, who can?
Possible places to look include entities other than national governments –states and regions, cities and businesses, which all have the option of reducing their emissions through setting and delivering the target of reaching net zero emissions by mid-century or before.
An <a href="https://www.zerotracker.net/analysis/net-zero-stocktake-2022/">analysis</a> published last month by the <a href="https://www.zerotracker.net/">Net Zero Tracker</a> consortium shows that a certain amount of momentum is embedded here. Over the last 18 months, the number of cities worldwide with net zero targets has doubled. The number of states and regions has increased as well, by over 50%. In the corporate sector, one-third of the world’s biggest publicly traded companies now have net zero targets, up from one-fifth at the end of 2020. This is especially noticeable in Europe; more than half of major corporates headquartered in the UK, France and Germany have set net zero targets for 2050 or earlier.
Along with this momentum in net zero target-setting, we are also seeing some – not enough – in the number of entities whose targets come with measures essential to their delivery, such as a plan, interim targets, an annual reporting mechanism, and low reliance on offsets. The number of cities meeting <a href="https://unfccc.int/sites/default/files/resource/Minimum-criteria-for-participation-in-RTZ.pdf" target="_blank" rel="noreferrer noopener">a fairly basic set of standards</a> set by the UN’s Race to Zero campaign increased five-fold over the last 18 months, and the number of corporates meeting the same standards rose too.
Logically, the number of entities with net zero targets and the quality of those targets should continue to increase rapidly. Concern about climate change <a href="https://climatecommunication.yale.edu/publications/international-public-opinion-on-climate-change-2022/toc/2/" target="_blank" rel="noreferrer noopener">is increasing</a> among the voting public. For businesses, both customers and shareholders can drive change. And the economics of energy continue to tilt inexorably: solar and wind power <a href="https://www.weforum.org/agenda/2021/07/renewables-cheapest-energy-source/" target="_blank" rel="noreferrer noopener">are now the cheapest form</a> of new energy capacity in most of the world, while electric car sales <a href="https://about.bnef.com/electric-vehicle-outlook/" target="_blank" rel="noreferrer noopener">have doubled in a single year</a>. As a consequence <a href="https://www.weforum.org/agenda/2021/01/coal-demand-asia-decarbonize-emissions/" target="_blank" rel="noreferrer noopener">coal demand is certainly in decline</a> (notwithstanding short-term increases due to the Putin-driven gas shortage), and <a href="https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/031621-world-oil-demand-may-have-peaked-in-2019-amid-energy-transition-irena" target="_blank" rel="noreferrer noopener">oil may be on an inexorable slide</a> too. This real-economy progress can persuade businesses to make stronger commitments, which in turn can encourage governments to be bolder.
If the ‘Big Mo’ on climate change among governments has stalled this year – and the indications are that it has – the ever-growing take-up of net zero targets can, if matched with growth in robustness, regenerate it. Given the climate change impacts to be faced if momentum does not regenerate, something is surely needed. A continuing but more vibrant race to zero may be the only game in town.
__
This article was <a href="https://www.euractiv.com/section/climate-environment/opinion/net-zero-vision-can-deliver-missing-climate-momentum-for-europe/" target="_blank" rel="noreferrer noopener">first published in Euractiv.com</a> on 27th July 2022.

Momentum can be strengthened by net zero targets from local authorities and businesses, writes Richard Black.

Net zero vision can deliver missing climate momentum for Europe

NZ Short History Timeline 22

Seldom does a concept come along that is both intuitively digestible and scientifically accurate. Net zero, a future state where the sum of human emissions and removals becomes zero, has come a long way quickly. It had to — achieving net zero is how we stop climate change.
But great success comes with great scrutiny. For net zero to deliver on, and retain, its new status as the lodestar for long-term decarbonisation, we need to go from target setting being universal to target quality being universally robust. The best time to improve the integrity of net zero targets was yesterday; the next best time is today.
The above timeline, created by Net Zero Tracker project lead John Lang, first appeared in our <a href="$PRIMARY_SITE_URL/analysis/net-zero-stocktake-2022">Net Zero Stocktake 2022</a> report, published June 2022.

From obscure scientific concept to 91% of the global economy in the blink of an eye.

Net Zero: A short history

Large companies committing to net zero hits critical mass in Europe, but major credibility gaps remain in global national, regional, city and corporate targets

<ul><li dir="ltr">More than one-third (702) of world’s largest publicly traded companies now have net zero targets, up from one-fifth (417) in December 2020. But, 65% (456/702) of corporate targets do not yet meet minimum procedural reporting standards.</li><li dir="ltr">National net zero targets set in domestic legislation or policy documents surge - from 10% of total GHG coverage in December 2020 to 65% in June 2022.</li></ul>
<ul><li dir="ltr">Number of large cities with net zero targets has doubled - from 115 to 235 - but more than 900 large cities still lack a net zero target.</li></ul>
<ul><li dir="ltr">Global North has set the majority of sub-national targets, however, net zero has not yet spread widely beyond high-income countries in North America, Europe, and Asia.</li></ul>

<a href="mailto:nick.hay@eciu.net" target="_blank" rel="noreferrer noopener"></a>Bonn, 13th June 2022: Demand for credible and robust net zero targets is mounting, but analysis shows that corporates and sub-national governments are falling short, reports a global stocktake of net zero commitments by the Net Zero Tracker.
The analysis — which draws upon the <a href="https://www.zerotracker.net/">Net Zero Tracker</a> database of over 4,000 entities, 1,180 of which have net zero targets — shows that most countries have now defined a path to net zero.
<ul><li dir="ltr">91% of global GDP is now captured by national government net zero targets, up from 68% in December 2020.</li><li dir="ltr">National government targets represent at least 83% of global GHG emissions (up from 61% in December 2020).</li><li dir="ltr">80% of the global population (up from 52%) is represented by national net zero targets.</li></ul>
Frederic Hans, climate policy analyst at NewClimate Institute and the report co-lead said:
“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:
“We are now at a watershed moment where peer pressure to hastily set net zero pledges, especially in the business sector, could result in either a mass flow of greenwashing - or a fundamental shift towards decarbonisation.
“Those companies, cities and states without a target will likely start to look like the odd ones out and those with targets must expect deeper scrutiny of their pledges.”
Crucially, the ‘Net Zero Stocktake’ report finds the share of national net zero targets that are enshrined in domestic legislation or policy documents has risen sharply from around 10% of total GHG coverage by all national net zero targets in December 2020 to around 65% in June 2022. As countries keep setting - and strengthening - commitments, the spotlight falls on those companies (65%), regions (84%) and cities (80%) that are yet to pledge net zero targets.
In contrast to the near-universal coverage of country-level net zero targets, the volume and robustness of targets set by non-state actors is alarmingly weak and bound to face increasing scrutiny as UN, national and NGO-led accountability initiatives ramp up. For example, UN Secretary General, António Guterres, recently launched the <a href="https://www.un.org/sg/en/content/sg/personnel-appointments/2022-03-31/expert-group-the-net-zero-emissions-commitments-of-non-state-entities%C2%A0">High-level Expert Group</a> to “develop stronger and clearer standards” for net zero emissions pledges by non-state actors, including businesses, investors, cities and regions, to accelerate implementation.
 
Integrity gaps blocking the path to global net zero:
<ul><li dir="ltr">About half of the 700+ corporate targets are embedded in the companies’ corporate strategy documents or annual reports, while most other companies have only announced—in some cases only their intention to set—net zero targets.</li><li dir="ltr">60% of companies that reported emission scopes coverage either only partially cover or do not cover their Scope 3 emissions at all.<ul><li dir="ltr">Only 38% of companies claim to cover all Scope 3 emissions.</li></ul></li><li dir="ltr">The volume of city net zero targets has doubled, from 115 to 235.<ul><li dir="ltr">Only 40% (94/235) of city net zero targets, representing 36%, in terms of total population covered by all cities’ net zero targets, are enshrined in domestic legislation or policy documents.</li><li dir="ltr">40% of city targets (94/235 cities), representing 36%, in terms of total population covered by all cities’ net zero targets, lack interim targets - or published planning documents - which are vital for the transparent evaluation of progress over the next eight years to 2030.</li></ul></li></ul>
Richard Black, Senior Associate, Energy &amp; Climate Change Intelligence Unit (ECIU), said:
“Ambitious interim targets are vital to delivering net zero and limiting cumulative emissions. But even leaving aside the climate emergency, the severe disruption to global fossil fuel supplies due to the Russian invasion demands that countries rapidly cut their dependency.
“Clear interim targets can be the solution to both the climate and energy crises; by providing the guardrails to accelerate the shift away from fossil fuels.”
Interestingly, the Fossil Fuels industry has the second highest percentage of net zero targets (49%) among those industries with more than ten companies in the Forbes 2000 list. The sectors with the third and fourth highest percentages, respectively, are also GHG-intensive: the Materials industry (e.g. steel and cement) and Transportation Services (e.g. airlines and shipping). These results suggest 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.
Dr. Thomas Hale, Associate Professor at the Blavatnik School of Government, University of Oxford, said:
“Science-aligned net zero pathways are now the baseline expectation for countries, companies, cities, and regions. It’s insane that two-thirds of the largest companies have yet to set a target for a transition that is well underway. But given a third now have - and that number has grown substantially - the increasingly glaring omissions raise the question of whether boards and management are doing their jobs.
“We need to shift from voluntary or aspirational pledges to concrete implementation plans with real accountability. For companies, this is already becoming a regulatory requirement in many jurisdictions.
“The smartest companies have seen the writing on the wall and are quickly moving ahead, but too many are still imagining that some sort of clever ESG accounting is going to allow them to avoid deep decarbonization.”
Dr Steve Smith, Executive Director, Oxford Net Zero, said:
“We’re seeing a proliferation of companies setting superficial targets due to growing peer pressure. This trend at least puts more firms on an escalator towards integrity, but until their targets improve to reflect the urgency of the climate emergency, they leave themselves wide open to criticism.
“We built the Net Zero Tracker to provide an open, online resource for checking the net zero pledges of countries, companies, cities and regions. With the light of scrutiny bringing greater clarity to net zero, boards should know that it’s becoming much easier for everyone - from regulators, to customers, investors, and employees - to see who has made a public commitment, and how robust that commitment looks.”
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. Interestingly, in the G7, the U.K., France and Germany lead the pack solely on the quantity of corporate net zero targets. The U.S., however, lies in sixth place, only just ahead of Italy. Crucially, the metrics of quality in corporate targets remain low across the board.

NZS G7 companies

Despite growing net zero traction in the G7, the NZT highlights an urgent imperative for global leaders to support developing economies in defining their own paths to net zero.
<ul><li dir="ltr">A minority of subnational net zero targets have been announced in low-income countries (less than 20% for states and regions, less than 40% for cities).</li><li dir="ltr">For the 1,177 cities in the database, about half in OECD countries (160/322) have net zero targets, while fewer than 10% (75/855) of cities in non-OECD countries were found to have net zero targets.</li></ul>
Dr. Angel Hsu, Director of the Data-Driven EnviroLab, said:
“This latest analysis highlights the concerning divide between the Global South and Global North on net zero.
“To make a rapid and Just Transition to net zero, no country can be left behind. At COP27, the Global North must recommit to delivering the climate finance and capacity-building required for the Global South countries to strengthen their net zero commitments.”
About the Net Zero Stocktake 2022 report:
This report updates and expands the data and analysis presented in the ECIU and Oxford’s ‘<a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets">Taking Stock</a>’ report, the first systematic analysis of global net zero commitments across countries, sub-national governments and major companies. Primarily, the latest analysis relates to the inclusion of a greater range of indicators and entities. However, as per the previous report, this report assesses the prevalence of targets and the robustness of those targets, but not implementation and progress toward those targets.
The data are drawn from the core Net Zero Tracker database, which is a “living” data resource updated continuously on a rolling basis. The data are freely available for download at <a href="http://www.zerotracker.net/">www.zerotracker.net</a>. The data collection cut-off date for this report was 1 June 2022, but the underlying dataset on the Net Zero Tracker will continue to be updated.
The analysis of net zero targets considered all targets that used one of the following terms: carbon negative, carbon neutral(ity), climate neutral(ity), climate positive, GHG neutral(ity), net zero, zero carbon, zero emissions, 1.5°C compatible and science-based targets.
About the Net Zero Tracker (NZT):

The <a href="https://www.zerotracker.net/">Net Zero Tracker</a> (NZT) is a global initiative led by the <a href="https://eciu.net/">Energy &amp; Climate Intelligence Unit</a>, <a href="https://datadrivenlab.org/">Data-Driven EnviroLab</a>, <a href="https://newclimate.org/">NewClimate Institute</a> and <a href="https://netzeroclimate.org/">Oxford Net Zero</a>, that assesses global net zero targets to promote transparency and ambition. The Tracker is geared to review a complex array of 50,000 data points on 4,000 entities' net zero targets encompassing governments, regions, cities and corporations, using open-source documents and data to categorise net zero targets in a comparable way.
The Tracker is geared to assess targets that, at the very least, include: a published plan; immediate emission-cutting measures; and an annual reporting mechanism. Net zero plans must depend primarily on genuine carbon-cutting rather than offsetting, and for businesses, strategies should include emissions generated by the use of their products and services (Scope 3 emissions).
The NZT database provides the only open-source independent review of the quality of net zero targets across countries, regions, cities and companies. It is intended to be used in combination with deep-dive analyses of entities’ emissions reduction performance, for example, NewClimate Institute’s <a href="https://climateactiontracker.org/">Climate Action Tracker</a> and the <a href="https://newclimate.org/2022/02/07/press-release-corporate-climate-responsibility-monitor-2022/">Corporate Climate Responsibility Monitor</a>. ___
 Media contact: <a href="mailto:nick.hay@eciu.net" target="_blank" rel="noreferrer noopener">nick.hay@eciu.net</a>
Twitter: <a href="https://twitter.com/NetZeroTracker">@NetZeroTracker</a> LinkedIn: <a href="https://www.linkedin.com/company/net-zero-tracker/" target="_blank" rel="noreferrer noopener">@NetZeroTracker</a>

Large companies committing to net zero hits critical mass in Europe, but major credibility gaps remain in global national, regional, city and corporate targets.

Net Zero Stocktake 2022

By Thomas Hale, professor of public policy at the Blavatnik School of Government, University of Oxford

Few would consider drilling oil to be a path to net zero emissions. But that was, in effect, what the <a href="https://www.ft.com/content/b8500163-4618-48dd-9e0b-d395b793331f">offset provider Bluesource</a> claimed when it worked with Merit Energy to capture CO₂ and pump it underground to squeeze more oil out of a well — a process termed enhanced oil recovery. The carbon credits Bluesource sold counted the emissions savings from the CO₂ that was put underground, but ignored the carbon footprint of the oil that was pumped out. This extreme example illustrates how voluntary offsetting — purchasing carbon credits to balance against one’s own emissions — needs rules. Some offsetting projects provide real benefits. But, like any unregulated marketplace, offsetting overall is falling short. How short? A lack of transparency makes even this basic question hard to answer.

<a href="https://zerotracker.net/">The Net Zero Tracker</a> — an independent research consortium that I co-lead — records the quantity and quality of net zero targets around the world. Shockingly, 91 per cent of country targets, 79 per cent of city targets, 78 per cent of regional targets, and 48 per cent of listed company targets fail to specify if offsets will be used in their net zero plans. Similarly, of the companies with a net zero target that say they will offset to some degree, 66 per cent fail to specify conditions on the use of offset credits, leaving the door open to ‘junk’ credits. Notably, 10 per cent of companies have committed to avoid offsetting altogether.

NZS companies offsets

In theory, properly designed, rigorous offsets could be one useful tool among the many instruments that we’ll need to achieve net zero. Once net zero is achieved, we will probably still have some level of residual emissions that will need to be permanently neutralised. Offsetting could be a tool for doing this, as my university colleagues and I have laid out in the <a href="https://www.smithschool.ox.ac.uk/sites/default/files/2022-01/Oxford-Offsetting-Principles-2020.pdf">Oxford Principles for Net Zero-Aligned Offsetting.</a>
However, most of the current offset market is not appropriate for this purpose. For example, many current offsets are generated from avoided emissions — like increasing energy efficiency, replacing fossil fuels with renewables, or halting deforestation — instead of existing emission removals. Of course, these are all important things to do. <a href="https://www.nature.com/articles/nclimate1354">Tropical deforestation contributes up to 17 per cent of annual global emissions</a> — about the same as <a href="https://ourworldindata.org/co2-emissions-from-transport">all the world’s cars and trucks</a>. Halting it is an urgent priority. But, while stopping additional emissions is welcome, it does not neutralise ongoing emissions — the amount of carbon in the atmosphere continues to grow. That is why we must see avoided emissions as supplements to, not substitutes for, reducing an enterprise’s own emissions.
What is more, many current offset projects are of questionable permanence. For example, increasingly damaging wildfires, driven in part by climate change, have claimed <a href="https://grist.org/wildfires/california-forests-carbon-offsets-reduce-emissions/" target="_blank" rel="noreferrer noopener">some of the very forests</a> that have been protected under offsetting schemes, eliminating the carbon savings.
Some offsetting schemes, like the <a href="https://leafcoalition.org/" target="_blank" rel="noreferrer noopener">LEAF Coalition</a> — a public-private initiative to protect tropical forests — make sophisticated and reasonable assumptions about how long carbon stored in trees or soils can be expected to endure, and have similarly rigorous verification mechanisms. Other schemes, however, do not.
On top of these quality concerns, there is a fundamental quantity problem. Last year, for example, data provider Ecosystem Marketplace reported that trades in the global voluntary carbon market had reached <a href="https://data.ecosystemmarketplace.com/">a record annual total of $1bn</a>, representing just under 300mn tonnes of CO₂-equivalent. But that is less than 1 per cent of global emissions, which, according to the International Energy Agency <a href="https://www.iea.org/news/global-co2-emissions-rebounded-to-their-highest-level-in-history-in-2021">also hit a record, of 36bn tonnes</a>. Given offsetting’s decidedly mixed track record to date, and the lack of strong standards, it is not surprising that civil society groups like Greenpeace have called for an end to the practice. It is also no wonder that leading net zero commitment platforms like the Science Based Targets initiative or the UN’s Race to Zero campaign do not allow offsets that substitute for, or delay, emissions reductions.
To move forward, we must return to first principles. To reach global net zero, we need to do three things. Most importantly, we must cut emissions immediately, and halve them by 2030. We must also urgently preserve and restore forests, oceans, soils and other natural carbon sinks. And, over time, we need to develop ways to neutralise emissions that may remain once net zero is achieved.
A well-designed offsetting system could, in theory, help with each of these, but not without a radical overhaul of the system as we know it.
Efforts like the <a href="https://www.iif.com/tsvcm" target="_blank" rel="noreferrer noopener">Taskforce on Scaling Voluntary Carbon Markets</a> and the <a href="https://vcmintegrity.org/" target="_blank" rel="noreferrer noopener">Voluntary Carbon Markets Integrity Initiative</a> have been working to put forward best practices. Ultimately, these will need to be built into a <a href="https://www.bsg.ox.ac.uk/research/publications/governing-net-zero-conveyor-belt" target="_blank" rel="noreferrer noopener">robust regulatory system</a>.
Companies seeking to use offsets can help. First, they can be transparent about what offsets they are using, and pick only quality products. Separating internal reductions targets from external offsets helps clarify net zero pathways. Companies should show the world what they are buying. Second, and critically, offsets cannot substitute for or delay science-aligned emissions reductions. Science-based reduction pathways are rapidly becoming the baseline expectation. Companies that want to show consumers and investors that they are going above and beyond can make contributions outside their value chains, by investing in nature or in future removals technologies. Finally, companies should support the emergence of a fit-for-purpose offsetting system. Junk credits and greenwashing undermine the trust and legitimacy companies will need if they are successfully to navigate the net zero transition. Strong governance is not just a public good, but also a crucial enabling condition for companies to achieve their goals.
——— 

This <a href="https://www.ft.com/content/32b1a051-7de6-4594-b31b-753e78aefde1" target="_blank" rel="noreferrer noopener">article was first published by the Financial Times</a> on 5 May 2022.

Offsets are not necessarily a no-no — but companies must be transparent in how they use them.

The carbon offset market is falling short. Here’s how to fix it

By Peter Chalkley, Director of the Energy and Climate Intelligence Unit

As brands go, ‘net zero’ probably wouldn’t make it into the ‘maybe’ pile for labelling the heroic mission to halt climate change. Its meaning is not self-evident and, as a rallying cry, it hasn’t caught on in the same way as other much-repeated slogans among the streets of climate campaigners. Greta Thunberg’s impassioned ‘listen to the science’ has in many ways cut through more.
But at its heart net zero is simply an expression of science. Start with ‘zero’. Put simply you can’t prevent climate change from getting worse if the build-up of emissions in the atmosphere keeps increasing. The ‘net’ reflects the fact that there are activities that are stubbornly difficult to decarbonise including flying and aspects of farming, which will still be putting emissions into the sky in 2050 and beyond. Soaking these up by planting trees that take carbon from the atmosphere and store it in their trunks as they grow — or indeed, new technologies that make machinery do likewise — is necessary if we are to bring balance back to our climate system.
And yet, in spite of its relative obscurity just a few years ago, the net zero concept has gone from, well, zero to climate hero among countries, cities and corporates in its short lifetime. Anything less than net zero won’t stop the problem getting worse and so isn’t up to the challenge. The <a href="https://zerotracker.net/">Net Zero Tracker</a> tells us that 90% of global GDP is now covered by a net zero commitment, which breaks down to 136 countries, 234 cities and 683 of the largest 2,000 listed companies on the planet.
Many of these commitments are designed to be ‘in line with’ the ambition of the now famous Paris Agreement, negotiated by all of the world’s countries back in 2015 to limit temperature rise to “well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C”. And then in Glasgow at the COP26 summit in November last year, the latest science was reflected in a shift of mood making a limit on warming of 1.5°C the central aim. A rise of 1.5°C may not sound like a lot, but it’s an average figure across the globe and, even at this level, 70-90% of the world’s corals (on which millions of livelihoods depend) die. When you bear in mind humans have already heated the planet by 1.2°C, you can see why so many country-level targets are set at 2050 or before. And some corporate targets come in way in advance reflecting the fact that decarbonising office space and travel isn’t that hard in the grand scheme of things.
To poach that iconic Australian tourism campaign slogan, if you don’t have a net zero target yet “where the bloody hell are you?” Companies not at the net zero party are becoming increasingly conspicuous and that includes those in B2B markets, not only B2C.
But setting a net zero target is only the first step to bringing down emissions. You need a plan, interim milestones, a realistic approach to ‘offsetting’, built-in accountability and a reputable standard to adhere to. Maybe as a starting point take a look at the <a href="https://climatechampions.unfccc.int/join-the-race/">Race to Zero’s criteria</a>.
<h3>Take a realistic approach to offsetting</h3>
All net zero targets are not created equal, far from it in fact. NGOs, and increasingly, investors have an allergic reaction to ‘greenwashing’ and this means your net zero target needs to be as good as you say it is. Companies are already getting called out for not having targets, but increasingly companies will also get questioned about any details of their plans not matching lofty rhetoric. The New Climate Institute recently published <a href="https://newclimate.org/2022/02/07/corporate-climate-responsibility-monitor-2022/">analysis</a> scrutinising the validity of 25 big brand companies’ targets by poking into the footnotes and appendices. Not many passed with flying colours.
Offsets is one area where targets consistently fall down. Paying for nature restoration and tree planting to mop up residual emissions from your inventory is fine, but only in small quantities. In the aggregate, targets assume far too much offsetting – there simply isn’t the land on Earth to plant that many trees if all companies follow suit.
Another basic trip-up is covering scopes 1 and 2, but not 3. That is to say, direct emissions, indirect emissions (e.g. from the portion of gas burned to generate the electricity purchased), but not value chains (downstream and upstream) where most of a company’s carbon footprint tends to live.
Net zero targets and plans will evolve, but companies are going to need to be honest and willingly embrace a journey of ever tighter target integrity.
<h3>Net zero is now a global megatrend</h3>
But net zero isn’t just a brand, or an expression of science, or indeed a target, it truly is a global megatrend, a race and also a means to a cleaner, healthier way of life. In the context of the societies they inhabit, companies that are setting a target need to see the bigger picture too. Publics want cleaner air, healthier diets, and in the context of the recent tragic events in Ukraine and the increasingly volatile oil and gas markets, greater energy security – with more clean homegrown energy, particularly wind and solar that doesn’t require a pipeline.
Net zero is also a catalyst and driver of innovation. Perhaps my favourite example is that of shipping line Maersk which set a 2050 net zero target, set about making clean shipping technology a reality and then reset its net zero target to 2040 just a few years later. By embracing the innovation required to decarbonise shipping, it realised there was a market for it from clients (providing a major competitive advantage), and that the technology could be fast-tracked.
Some will say net zero isn’t enough, that ‘real zero’ is what’s required. The reality is there will always be some residual emissions, so the ‘net’ will be needed, but targets should be as close to zero as possible. And while 2050 sounds like a long way off, to stay on course we need to be halving emissions over the next decade. Long-term targets mean immediate near-term action.
But the first step is ensuring you have a net zero target that’s up to scratch.
___
This article was first published by <a href="https://www.warc.com/newsandopinion/opinion/net-zero-targets-must-include-scope-3-emissions-and-the-plan-must-be-realistic-and-actionable/en-gb/5642" target="_blank" rel="noreferrer noopener">WARC</a>.

Setting a net zero target is only the first step to bringing down greenhouse gas emissions.

What net zero targets must include

By John Lang, Net Zero Tracker project lead for the Energy &amp; Climate Intelligence Unit

Yesterday it was mainstream, now it’s universal. Net zero targets have exploded over the last two years – in a flash, they’ve now been adopted by one-third of the world’s largest publicly-traded corporations. At the time of writing, 90% of GDP is now covered by a national net zero target of some description. 
The transition to net zero economies will of course be delivered by people – by the early adopters and the leaders, by the skills they learn, and by the culture that they embed. HR leaders, then, stand at the brink of a defining opportunity: to recruit, foster, and accelerate the necessary skills to make every firm ‘net zero ready’. 
Companies that fail to embrace the climate action imperative face risks of backlash from stakeholders, including current and potential employees. IPSOS Mori recently reported that <a href="https://www.ipsos.com/ipsos-mori/en-uk/ipsos-mori-issues-index-november-2021" target="_blank" rel="noreferrer noopener">climate change tops the list of concerns</a> keeping British folks awake at night.
<h3 dir="ltr">Radical climate transparency is here</h3>
Until recently, methods of scrutinising corporate net zero targets were not able to stay abreast of target setting. That's changing, fast.
Just launched, the <a href="https://www.zerotracker.net/" target="_blank" rel="noreferrer noopener">Net Zero Tracker</a> is a powerful, new, independent and objective benchmarking tool for tracking the integrity of net zero commitments.
Our Tracker enables anyone to hold the world’s most important entities – including publicly-owned businesses – to account for the effectiveness of their targets and their intention to deliver the same. It’s here to support the new <a href="https://www.france24.com/en/live-news/20211115-kerry-says-cop-26-opens-era-of-accountability" target="_blank" rel="noreferrer noopener">era of accountability</a> on climate action.
<a href="https://www.hrzone.com/lead/change/the-climate-crisis-five-ways-to-support-employees-with-eco-anxiety" target="_blank" rel="noreferrer noopener">Peaking climate concern</a> and radical transparency has made whether a company has a credible path to net zero, a critical factor in attracting and retaining the best talent. 
Whatever your impressions of the Glasgow climate summit, COP26 provided an acutely deafening alarm – that the door to keeping 1.5°C alive is ajar – but only just – and that every sector of the economy has a role to play in halving global emissions by 2030 or thereabouts, before reaching net zero by mid-century.
<h3 dir="ltr">Net zero targets are ubiquitous, but not all targets are created equal</h3>
These realisations, as well as pressure from stakeholders – from investors, to customers, to regulators – has driven an explosion of new net zero targets in the last 12 months. To date, <a href="https://www.zerotracker.net/" target="_blank" rel="noreferrer noopener">681 of the world’s largest companies by revenue have set net zero targets</a>, covering a total combined global revenue of over $20 trillion. 
The rapid uptake of targets comes not a moment too soon. The science is clear that radically slashing emissions at source, and then permanently neutralising residual emissions through enhanced natural carbon sinks and carbon removal technologies, is our only hope of keeping to the guardrail of 1.5°C. 
But not all net zero targets are created equal. For example, to be effective, a target has to, at the very minimum, include the following:
<ul><li dir="ltr">Short-term and long-term milestones.</li><li dir="ltr">A plan for achieving them.</li><li dir="ltr">Reporting mechanisms.</li><li dir="ltr">Demonstrable near-term actions.</li><li dir="ltr">Other minimum procedural criteria set out by the <a href="https://unfccc.int/climate-action/race-to-zero-campaign" target="_blank" rel="noreferrer noopener">UNFCCC’s Race to Zero campaign</a>.</li></ul>
Credible net zero targets can provide the goalposts for transformation, but in the past few years, many entities mistook ‘net zero’ as a buzzword, or sought to co-opt the scientific concept to deflect pressure for rapid decarbonisation. Some CEOs have undoubtedly used net zero targets as a lick of green paint – used to delay the hard reality of rethinking carbon-intensive business models.
This paint would often be accompanied with superficial plans to pay for <a href="https://theconversation.com/net-zero-emissions-targets-are-everywhere-we-need-to-sort-the-genuine-from-the-greenwash-150127" target="_blank" rel="noreferrer noopener">offsets</a> (carbon credits) instead of tackling emissions directly. Then there were the ‘NIMTO’ (Not In My Term of Office) leaders that signed 2050 pledges without fully implementing them, passing the buck to their successors.
<h3 dir="ltr">From intent to integrity</h3>
But now, we’ve reached an inflection point on target-setting. There are emerging signs that government and corporate net zero commitments are growing stronger.
Recent Net Zero Tracker analysis found that public companies setting net zero targets that meet 'minimum procedural standards' have increased in the last year almost <a href="https://www.zerotracker.net/analysis/post-cop26-snapshot/" target="_blank" rel="noreferrer noopener">two-fold by number</a>: from 110 to 207, and almost four-fold as measured by revenue: from $2,148 billion to $8,049 billion.
The trend is for corporates to set targets lacking the necessary rigour to deliver a timely, effective arrival at net zero — but, as commitments are adopted, integrity is slowly improving.
Today, companies have even more incentive to strengthen their plans, cover all their emission scopes and meet deadlines to operationalise net zero pathways. The future direction is ineluctable, but a business can't say it’s climbed a mountain until it’s made it back down. 
So, how can HR leaders nurture a net zero culture to ensure they arrive on time?
<h3 dir="ltr">How to become net zero ready</h3>
HR teams play a fundamental role in both developing and channelling the skills to make organisations net zero ready. Solutions to climate change are a whole-economy, whole-enterprise undertaking. All departments – from R&amp;D, to supply chain, to finance, to marketing – can help to create the conditions for value chain transformation.
Education sits at the core of this challenge. HR teams should by now be familiar with their organisation’s exposure to climate risk and its mitigation and adaptation strategies.
Developing a relationship with your Chief Sustainability Officer is a key step to developing an inside-out understanding of the most greenhouse gas-intensive areas of the business. This knowledge can, in turn, determine the departments most in need of new ways of working, improved skillsets and innovation. 
<blockquote>Net zero non-participation is simply bad business these days, but increasingly, so too is poor participation. </blockquote>
An outside-looking-in view might help. Put yourself in the shoes of a potential candidate researching your firm prior to an interview. In today’s world, there’s an increasing chance they’ll have heard of or used the Net Zero Tracker, or similar tool, to gauge whether your firm has a net zero commitment. That candidate may know whether the target is merely ‘in discussion’ or baked into strategy. They’ll see if that target includes interim milestones or a clear reporting mechanism. They could also gauge, should they wish, if the target relies too excessively on external offsets at the expense of reducing emissions from your value chain.
(For the record, <a href="https://www.zerotracker.net/analysis/post-cop26-snapshot/" target="_blank" rel="noreferrer noopener">43% of publicly listed firms’ targets</a>, as measured by revenue, plan to use offsetting, but a whopping 66% of these plans fail to specify any conditions on the use of offsets whatsoever.)
As of right now, and even more so in the future, the chances are that any prospective candidate can see if your company has a clear, deliverable plan to participate – or perhaps lead – the biggest economic and energy transformation ever. 
Net zero non-participation is simply bad business these days, but increasingly, so too is poor participation. Net zero is here; take it seriously or beware.
___
This article was first published in <a href="https://www.hrzone.com/lead/culture/nurturing-a-net-zero-ready-culture-a-defining-moment-for-hr">HR Zone</a> on 10th January 2022.

With net zero targets and climate disclosure requirements exploding, John Lang explains how HR teams can help their firms become ‘net zero ready’.

Nurturing a net zero-ready culture – a defining moment for HR

<ul><li>The share of revenue from publicly-traded corporate net zero targets meeting minimum procedural standards has increased almost four-fold in a year, signalling momentum, but firms must urgently strengthen targets.</li><li>The use of offsets is ill-defined across all entities, with 91% of country targets, 79% of city targets, 78% of state and regional targets and 48% of public company targets failing to specify if - and how - offsets will be used in net zero plans1.</li><li>43% of the world’s largest 632 firms, as measured by revenue, plan to use offsetting - but 66% of these plans fail to specify any conditions on the use of offset credits.</li><li>Only 32% of corporate net zero targets cover the entirety of Scope 3 emissions – and 25% of targets only partially cover Scope 3.</li><li>Most city net zero targets are not binding - 66% of targets exist only as pledges, or ‘in discussion.’</li></ul>

Thursday 25th November 2021: A new analysis, <a href="https://www.zerotracker.net/analysis/post-cop26-snapshot/">Post-COP26 Snapshot</a>, from the Net Zero Tracker shows major corporates have significantly strengthened net zero targets in the last year, but there is an urgent need for all entities to shift commitments from pledges into near-term policies and laws.
The snapshot of net zero targets from more than 4,000 entities, including nations, states &amp; regions, cities and corporations, shows leaders must rapidly shift ‘from quantity to quality’ target-setting - to operationalise the Glasgow Climate Pact signed by leaders at COP26.
Richard Black, Senior Associate, Energy &amp; Climate Change Intelligence Unit (ECIU), said:
“90% of GDP is now covered by a net zero target of some kind, but there are huge variations in the robustness and credibility of these targets. The Net Zero Tracker allows all stakeholders to see these variations in all their detail and so better hold their countries, regions, cities and businesses to account, highlighting shortfalls and driving standards up.”
To date, the total combined global revenue covered by public company net zero targets amounts to just over $19.5tn USD. The analysis shows a trend amongst corporates to set targets lacking the necessary rigour to deliver a timely, effective arrival at net zero but, as commitments are adopted, integrity is slowly improving.
<ul><li>Companies setting net zero targets meeting 'minimum procedural standards' have increased in the last year almost two-fold by number (from 110 to 207) and almost four-fold (from $2,148bn to $8,049bn) as measured by revenue2.</li><li>Companies meeting both minimum standards and leadership practices has doubled in the last year by number, from 11 to 22, and increased 16-fold (from $82bn to $1,345bn) as measured by revenue.</li></ul>
Outside of the corporate momentum, the analysis reveals that the use of offsetting is a primary area where all net zero targets must increase integrity. Most countries and public companies have not clearly specified how they will use offsets, signalling a trend towards using offsets improperly, instead of up-front action to cut near-term emissions. The majority of the companies also do not clarify to what extent they plan to rely on carbon dioxide removal.
<ul><li>Achieving a scientific balance between sources and sinks to realise net zero demands that plans depend primarily on genuine carbon-cutting, rather than offsetting. The NZT reveals the following:</li><li>91% of country targets, 79% of city targets, 78% of regional targets, and 48% of public company targets fail to specify if - and how - offsets will be used in their net zero plans3.</li><li>43% of the revenue of the world’s 632 largest public companies plan to use offsetting - but 66% of those plans fail to specify conditions on the use of offset credits.</li><li>Notably, 10% of companies have committed to avoid using any offsetting whatsoever.</li><li>Nearly one in five (17%), of states and regions’ net zero plans include the use of offsets, but of that figure, 91% have not specified the conditions of their use of offsets.</li></ul>
Dr Steve Smith, Executive Director, Oxford Net Zero, said:
“We are seeing a huge number of net zero plans that keep the door open to buying offset credits. That is worrying, because the market is awash with cheap credits of dubious quality. We can't offset all the way to real, global net zero. Leaders need to prioritise cutting their own emissions and set out clear rules and limits to their offsetting."
Cities have seen the largest recent rise in new net zero targets, with an 87% rise in new targets set over the last 12 months. However, perhaps as a result of this rapid shift, city-wide net zero plans are currently the most superficial – with 66% of targets existing only as pledges, or ‘in discussion.’
Net zero also demands that - for businesses - strategies must include emissions generated by the use of their products and services from supply chains, plus the lifecycle after a product or service is sold, including ongoing processing, further transport, use and disposal (so-called Scope 3 emissions). The largest proportion of carbon footprints – up to 95% - comprises Scope 3 emissions, yet the analysis reveals that most major companies have not yet faced up to the challenge of tackling Scope 3.
<ul><li>Only 32% of corporate net zero targets cover the entirety of Scope 3 emissions.</li><li>25% of corporate targets only partially cover Scope 3.</li><li>76% of major public companies have captured direct emissions (Scope 1), plus the in-direct emissions from purchased power (Scope 2) in net zero plans.</li></ul>
Prof. Angel Hsu, Director of the Data-Driven EnviroLab, said:
“Given Scope 3 reporting is hard and it’s currently voluntary, most firms take an ‘à la carte’ approach to carbon reporting and action - choosing the lowest hanging fruit and ignoring potentially the largest emissions sources in their value chain.
“To realise net-zero, firms must urgently shift to the ‘set menu’ – tracking and tackling Scope 3 emissions, where the broadest opportunities for greenhouse gas emission reductions lie.”
The Net Zero Tracker is geared to identify targets that include clear robustness criteria – i.e. those that include a published plan, immediate emission-cutting measures and an annual reporting mechanism. The analysis also compares key indicators of net zero governance, revealing the following insights:
<ul><li>81% of corporates, 67% of states and regions, and 60% of cities include interim targets within their net zero plans. 135 countries (100% of country net zero plans) include interim targets; since all 135 nations have submitted NDCs with interim targets for 2025/30.</li><li>79% of regions’ targets include net zero reporting mechanisms, followed by 75% of public companies, 60% of country targets and 37% of city targets.</li><li>78% of emissions from regions are covered by published net zero plans, followed by 63% of country-level emissions, 62% of emissions from public companies and 48% of emissions from cities4.</li></ul>
There is a vital need for leaders to be held accountable for delivering net zero targets across national and subnational governments and corporations. Yet, across the board, hardly any net zero targets articulate that the leadership roles are accountable for delivering net zero plans.
<ul><li>18% of corporate leaders are accountable for net zero targets set in the near future, while in governments only 5% of city leaders, 2% of national leaders and 2% of regional and state government leaders are accountable for net zero.</li></ul>
Dr Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute, said:
“Following COP26, net zero is almost universal. Now, both governments and corporates must shift targets to a stronger footing, to operationalise net zero and drive rapid short-term emissions cuts.
“The message is getting through, but we have a long way to go. If governments, or corporates have set out a fully-fledged plan, they must quickly clarify how they will reach their targets. It is problematic that only a small fraction of government and corporate leaders are currently held accountable for their emission reduction actions.”

About the latest Net Zero Tracker analysis:
The latest analysis from the NZT released today - and outlined above, reflects a snapshot of global net zero targets taken on 16th November 2021. The snapshot examines the net zero targets of 135 countries; 229 cities, 110 states and regions, plus 632 of the world’s largest companies by revenue that have set net zero targets. The criteria assessments of entities’ net zero targets use the
following metrics (rather than number counts) to provide a fuller picture of net zero targets globally: for countries, we measure criteria as a share of emissions; for cities and regions as a share of population; and for companies as a share of annual revenue.

About the Net Zero Tracker
The Net Zero Tracker is a global initiative led by the <a href="https://eciu.net/" target="_blank" rel="noreferrer noopener">Energy &amp; Climate Intelligence Unit</a>, <a href="https://datadrivenlab.org/" target="_blank" rel="noreferrer noopener">Data-Driven EnviroLab</a>, <a href="https://newclimate.org/" target="_blank" rel="noreferrer noopener">NewClimate Institute</a> and <a href="https://netzeroclimate.org/" target="_blank" rel="noreferrer noopener">Oxford Net Zero</a> that assesses global net zero targets to promote transparency and ambition. The NZT is geared to analyse 4,000+ actors’ pledges – encompassing governments, regions, cities and corporations, using open-source documents and data to categorize net zero targets in a comparable way.
The NZT builds on the ECIU and Oxford’s <a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets" target="_blank" rel="noreferrer noopener">Taking Stock</a> report, and the <a href="https://newclimate.org/2020/10/22/navigating-the-nuances-of-net-zero-targets/" target="_blank" rel="noreferrer noopener">Navigating the Nuances of Net Zero</a> report by the NewClimate Institute and Data-Driven EnviroLab, the first systematic analyses of global net zero commitments across countries, sub-national governments and major companies. The NZT is designed to enable state actors, businesses, campaigners, academics, and the public to benchmark the quantity and quality of net zero targets in order to track progress towards global climate targets on an ongoing basis. The NZT relies on a combination of machine learning, a team of trained volunteers and experienced climate policy analysts to keep tabs in real-time on both the quantity and, importantly, quality of net zero targets. It will eventually include more entities, and comes with a website allowing users to freely access, download and analyse data.
Twitter: <a href="https://twitter.com/NetZeroTracker" target="_blank" rel="noreferrer noopener">@NetZeroTracker</a>
YouTube: <a href="https://www.youtube.com/watch?v=fIim8lPkhVk" target="_blank" rel="noreferrer noopener">What is the Net Zero Tracker</a>
ENDS
For further information, or a briefing with a member of the Net Zero Tracker team, please contact: E: <a href="mailto:nick.hay@eciu.net" target="_blank" rel="noreferrer noopener">nick.hay@eciu.net</a>
M: +44 (0) 7378 250 228

Targets are improving, but must be strengthened to deliver net zero, post-COP26 analysis shows.

Post-COP26 Snapshot

5th November 2021
 
A lifeline to a 1.5-degree world
If you'd told delegates to the Paris climate summit in 2015 that in six years' time 90 per cent of global GDP and 88 per cent of global greenhouse gas emissions would be covered by net zero pledges, they would have been astonished. But that's the reality.
The uptake of net zero targets has been blindingly fast, but it comes not a moment too soon. The science is clear that radically reducing global emissions to a tiny fraction of their current level, and then permanently neutralizing the small residual that may remain, is our best hope of a 1.5℃ pathway. Put simply, until we reach global net zero, climate change will continue to worsen.
Net zero emerged in the scientific literature around 10 years ago, and was pushed into the Paris Agreement by activists and vulnerable countries as a "balance between sources and sinks". Now, net zero is well into the process of operationalization, which requires a further shift from announcements to plans, and from pledges to rules. 
Not all net zero pledges are created equal
Since Paris, net zero pledges have exploded. Countries, companies, business, regions, investor groups, universities are all saying they are going to net zero. However, not all net zero pledges are created equal. Some include all emissions; some don't. Some rely on accounting sleight of hand; some don't. Some entail short-term targets and immediate action; others don't. Some are embedded in clear plans and accountable institutions; some aren't.
The key thing is to turn the intention into a transparent, credible framework that at the very least includes a published plan, immediate emission-cutting measures and an annual reporting mechanism. Net zero plans must depend primarily on genuine carbon-cutting rather than offsetting, and for businesses, strategies should include emissions generated by the use of their products and services (so-called Scope 3 emissions).

G20 Coverage Twitter

<a href="https://twitter.com/_richardblack" target="_blank" rel="noreferrer noopener"></a>Looking under the hood of net zero: The Net Zero Tracker
We need to make net zero not only universal, but universally robust. A requirement for that is being able to track which plans are strong, and which have work to do. That's where the<a href="https://www.zerotracker.net/"> </a><a target="_blank" href="https://www.zerotracker.net/" rel="noreferrer noopener">Net Zero Tracker</a> comes in, a powerful, impartial tool for benchmarking the scope and rigour of commitments made by all the most important entities setting net zero targets, which just launched. The Tracker is geared to analyse 4,000+ actors' pledges - encompassing nations, states &amp; regions, cities and corporations - and track their evolution over time.
The Net Zero Tracker gives entities setting net zero targets the ability to benchmark themselves against science and against their peers. And it's going to give the stakeholders of those entities—their citizens, their consumers, their investors, their business partners, and their critics—a tool to push for more action.
The tracker is based on radical transparency. We use open-source documents and data to categorise net zero targets in a comparable way. At the core of this effort is not just scientific expertise, but people power - a global team of volunteers who sort through the complex array of information and put it into an analytic framework.
We need both quantity and quality to keep 1.5 alive
More targets are being set and flimsy targets are shifting to a stronger footing, but governments, and corporates must move faster, especially on reducing emissions in the short term. We have a long way to go, but the message is getting through, if governments, or corporates have set out a fully-fledged plan, they must quickly clarify how they will reach their targets: those that do so will earn plaudits if their plans are robust, while those with unviable or absent plans will face increasing criticism from all stakeholders.
Net zero targets are shifting: from intent to integrity
In the past few years, many entities mistook net zero targets as a buzzword, or even sought to co-opt the scientific concept to deflect pressure for decarbonisation. Some CEOs sought to treat net zero targets like a reputational shroud that could be thrown over a carbon intensive business, with only superficial plans to pay for <a target="_blank" href="https://theconversation.com/net-zero-emissions-targets-are-everywhere-we-need-to-sort-the-genuine-from-the-greenwash-150127" rel="noreferrer noopener">offsets</a> instead of tackling emissions. Then there were the ‘NIMTOs'<a href="https://eciu-my.sharepoint.com/personal/nick_hay_eciu_net/Documents/Attachments/Net%20Zero%20is%20maturing.docx#_msocom_1"> </a>- ‘Not In My Term of Office' - leaders that signed 2050 pledges without fully integrating them, leaving the challenge for their successors.
But now, we are at an inflection point on net zero target-setting - a shift from intent to integrity. From the top, there are now clear signs that national net zero commitments are getting stronger. The number of countries with net zero pledges in law has doubled since last year, rising to cover 19 per cent of global GDP, up from six per cent last year.
Alongside governments, the number of large firms in G20 countries setting clearer targets has doubled from five per cent to ten per cent in the last 11 months. To date, 184 of the 2,000 largest multinationals are setting the pace in the race to zero, having set net zero targets that meet basic standards of quality.
We really are in a race to zero. The Net Zero Tracker is giving us the scorecard, to help us all sprint faster.

——
Richard Black is senior associate at the Energy &amp; Climate Change Intelligence Unit (ECIU), and <a href="https://twitter.com/thomasnhale" target="_blank" rel="noreferrer noopener">Thomas Hale</a> is professor of global public policy at the University of Oxford's Net Zero Initiative.
This <a href="https://www.businessgreen.com/opinion/4039751/end-beginning-net-zero" target="_blank" rel="noreferrer noopener">article was first published in BusinessGreen</a> on 4 November 2021.

At the outset of COP26 now that ‘net zero’ has become nearly universal, it must become universally robust, argue ECIU's Richard Black and University of Oxford professor Thomas Hale.

The end of the beginning of net zero

<ul><li>Quality-geared Net Zero Tracker reveals major target-setting momentum across G20 governments, with a doubling of countries with legal net zero pledges since last year.</li><li>Only India and Mexico have yet to formally declare they will move to net zero.</li><li>Of the 18 G20 members with net zero targets, already 5 have clear plans and commitments for reaching net zero by 2050, but other countries must now follow.</li><li>1 in 3 of the largest listed companies in G20 countries now have net zero targets, up from 1 in 5 last year. Quality commitments that meet robustness criteria have doubled since 2020.</li><li>Large city and regional net zero commitments in the G20 have doubled since 2020, but 83% of G20 regions and 69% of cities still lack a net zero target of any kind.</li><li>High ambition of national, sub-national government and corporate segments of the G20 shows how ‘ambition loops’ can accelerate economies towards net zero.</li></ul>

27th October 2021: The Net Zero Tracker, a powerful ‘quality-focused’ benchmark of climate targets, reveals that existing net zero pledges are increasingly being followed up with robust integrated plans - but this momentum must increase and accelerate during and following COP26.
With countries announcing 5 new targets in the past 20 days, net zero pledges can be a lifeline to avert climate breakdown, providing all targets urgently adopt clear robustness criteria – i.e., they must include a published plan, immediate emission-cutting measures and an annual reporting mechanism, and plans must not depend hugely on offsetting.
The analysis shows that over 80% of global GDP (measured via purchasing power parity) and 77% of global greenhouse gases are now covered by a national net zero target, up from 68% and 61% last year, respectively. However, when only considering countries with strong commitments and clear plans to reach net zero by mid-century, 10% of global GDP and 5% of global emissions are covered, showing how further steps to clarify and strengthen net zero targets, including matching them with immediate action, are urgently needed.
Net zero was enshrined into the Paris Agreement as a science-based approach to radically reducing, before entirely neutralising greenhouse gases, as the optimal path to 1.5℃. Subsequently, many entities have embarked on a journey to net zero without putting clear strategies in place.
However, there are now clear signs that national net zero commitments are getting stronger. The number of countries with net zero pledges in law has doubled since last year, rising to cover 20% of global GDP, up from 6% last year.
Alongside governments, a group of corporates are leading the race to make their net zero targets more rigorous, increasing confidence that they will be delivered and help put the world on a 1.5-degree C. pathway.
The analysis signals an inflection point in target-setting of the largest firms:
<ul><li>33% of the G20’s largest businesses<a href="https://content.zerotracker.net/admincp/entries/analysis/6239-pr-g20-net-zero-stocktake#_ftn1">[1]</a> have set a net zero target, although two-thirds of those now need to be strengthened by publishing clear plans.</li><li>However, the number of large firms in G20 countries setting clearer targets has doubled from 5% to 10% in the last 11 months.</li><li>The economic weight of companies setting net zero targets is even higher. Firms with net zero targets account for 47% of the annual revenue of the largest companies in the G20.</li><li>Firms with robust net zero targets account for 19%.</li></ul>
Richard Black, Senior Associate, Energy &amp; Climate Change Intelligence Unit (ECIU), said:
“Over 150 of the 2,000 largest multinationals are setting the pace in the race to zero, having set net zero targets that meet fundamental standards of quality.
“The quality of existing targets is rising, but more than 20% of major G20 firms must urgently shift their targets from intent to integrity if they want to be taken seriously, and the other two-thirds of them—nearly 1,000 firms—need to quickly wake up to the reality of this transition.
“Our analysis indicates that G20 businesses, and in some cases cities and regional governments too, are leading national governments, that have not yet set quality net zero targets. If ambition loops can be created across whole economies, it’s clear that countries can move at an eye-popping rate towards net zero.”
The <a href="https://www.zerotracker.net/">Net Zero Tracker</a> (NZT) is a global initiative led by the <a href="https://eciu.net/" target="_blank" rel="noreferrer noopener">Energy &amp; Climate Intelligence Unit</a>, <a href="https://datadrivenlab.org/" target="_blank" rel="noreferrer noopener">Data-Driven EnviroLab</a>, <a href="https://newclimate.org/" target="_blank" rel="noreferrer noopener">NewClimate Institute</a> and <a href="https://netzeroclimate.org/" target="_blank" rel="noreferrer noopener">Oxford Net Zero</a>. The NZT is geared to analyse 4,000+ actors’ pledges in real time – encompassing nations, states &amp; regions, cities and corporations. The NZT builds on the ‘<a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets" target="_blank" rel="noreferrer noopener">Taking Stock</a>’ report published in March 2021 by ECIU and Oxford Net Zero, and the ‘<a href="https://newclimate.org/2020/10/22/navigating-the-nuances-of-net-zero-targets/" target="_blank" rel="noreferrer noopener">Navigating the Nuances of Net Zero’</a> report by the NewClimate Institute and Data-Driven EnviroLab - the first quantitative and qualitative analyses of global net zero commitments.
The NZT relies on a combination of machine learning and a global team of trained volunteers to keep tabs in real-time on both the quantity and, importantly, quality of net zero targets. It will eventually include more entities, and comes with a new website allowing users to freely access, download and analyse data.
Professor Thomas Hale, Global Public Policy, the University of Oxford’s Blavatnik School of Government, said:
“Remarkably, net zero has now gone fully mainstream, but not all net zero pledges are created equal. As targets and pledges proliferate, this Tracker will shine a light on which ones are genuinely ambitious, comprehensive, transparent and accountable.
“It’s going to give entities setting net zero targets the ability to benchmark themselves against science and against their peers. And it’s going to give the stakeholders of those entities—their citizens, their consumers, their investors, their business partners, and their critics—a tool to push for more action.
“The Tracker is a major step forward for radical transparency, but clear standards are also vital to ensure that net zero targets are delivered.”
The NZT has assessed the pledges of all key actors, including national governments, regional governments in the top emitters, and city governments over 500k in population. It also tracks the 2,000 largest publicly traded businesses globally. The Tracker analyses public-facing declarations of net zero targets by entities.
Within some G20 economies ‘ambition loops’ across national government, local governments and businesses are emerging.
Dr. Takeshi Kuramochi, senior climate policy researcher at NewClimate Institute, Germany, said:
“In Japan, one factor that contributed to the national government pledging the 2050 net zero goal in October 2020 was that most subnational regions and major cities had already pledged 2050 net zero by then. Now, with the new national 2030 target, regions and cities are also revising their 2030 targets for more ambitious ones. National ministries have also been cooperating with the business sector to implement 2050 net zero hand-in-hand.”
In the UK, which is targeting a 78% reduction in carbon emissions by 2035 before reaching net zero in 2050, the following ambition is evident across the country:
<ul><li>All the UK’s 16 largest cities have set a net zero pledge; half of that number have set quality targets.</li><li>72% of the UK’s largest corporates have set a net zero target; 19% meet minimum quality checks<a href="https://content.zerotracker.net/admincp/entries/analysis/6239-pr-g20-net-zero-stocktake#_ftn2">[2]</a>.</li></ul>
Low or static levels of net zero ambition are replicated across entire economies. For example, in Russia, Turkey, or Brazil, the number of regions, cities, and businesses setting net zero targets has remained similar to last year. In India, another G20 country that has not yet announced a net zero target, the number of cities and companies setting targets has grown but still remains at low levels.
In Australia, the last developed G20 country to declare a net zero target, all subnational regions and 2/3 of the largest businesses had net zero targets in advance of this week’s national announcement. Of the latter, 1/3 are quality targets.
Dr Angel Hsu, Assistant Professor, Founder, The Data-Driven EnviroLab, University North Carolina, said:
“Top-down leadership on net zero is vital to bring all actors to the table. Countries that lack credible targets risk falling behind in the global race. Credible net zero targets represent a bond of trust between leaders and their societies – a clear, realisable plan to lead the net zero transformation, instead of being shaped by it.”

[1] 516 out of 1,575 of the G20’s largest businesses have a net zero target and 164 of those pledges meet basic quality criteria. We define ‘largest businesses’ here by membership of the Forbes 2,000 list.
<a href="https://content.zerotracker.net/admincp/entries/analysis/6239-pr-g20-net-zero-stocktake#_ftnref2">[2]</a> 56/79 of the UK’s largest corporates have set a net zero target, 15 have set quality targets.

About the Net Zero Tracker
The Net Zero Tracker is a global initiative led by the <a href="https://eciu.net/" target="_blank" rel="noreferrer noopener">Energy &amp; Climate Intelligence Unit</a>, <a href="https://datadrivenlab.org/" target="_blank" rel="noreferrer noopener">Data-Driven EnviroLab</a>, <a href="https://newclimate.org/" target="_blank" rel="noreferrer noopener">NewClimate Institute</a> and <a href="https://netzeroclimate.org/" target="_blank" rel="noreferrer noopener">Oxford Net Zero</a> that assesses global net zero targets to promote transparency and ambition. The NZT is geared to analyse 4,000+ actors’ pledges – encompassing governments, regions, cities and corporations, using open-source documents and data to categorize net zero targets in a comparable way.
The NZT builds on the ECIU and Oxford’s <a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets" target="_blank" rel="noreferrer noopener">Taking Stock</a> report, and the <a href="https://newclimate.org/2020/10/22/navigating-the-nuances-of-net-zero-targets/" target="_blank" rel="noreferrer noopener">Navigating the Nuances of Net Zero</a> report by the NewClimate Institute and Data-Driven EnviroLab, the first systematic analyses of global net zero commitments across countries, sub-national governments and major companies. The NZT is designed to enable state actors, businesses, campaigners, academics, and the public to benchmark the quantity and quality of net zero targets in order to track progress towards global climate targets on an ongoing basis. The NZT relies on a combination of machine learning, a team of trained volunteers and experienced climate policy analysts to keep tabs in real-time on both the quantity and, importantly, quality of net zero targets. It will eventually include more entities, and comes with a website allowing users to freely access, download and analyse data.
Twitter: <a href="https://twitter.com/NetZeroTracker" target="_blank" rel="noreferrer noopener">@NetZeroTracker</a> 
ENDS
For further information, or a briefing with a member of the Net Zero Tracker team, please contact: E: <a href="mailto:nick.hay@eciu.net" target="_blank" rel="noreferrer noopener">nick.hay@eciu.net</a>
M: +44 (0) 7378 250 228

Net zero targets are becoming mainstream in G20 governments and businesses, but more must follow to realise ‘ambition loops’ that can accelerate the transition.

G20 Net Zero Stocktake

By Richard Black, Senior Associate, Energy &amp; Climate Intelligence Unit; Steve Smith, Executive Director, Oxford Net Zero, University of Oxford; Thomas Hale, Professor in Public Policy, University of Oxford

It might seem odd to find supporters of climate action debating the merits of a concept that science shows to be essential for halting climate change, and which is accordingly embedded at the heart of the defining global agreement.
Yet that is where we find ourselves with the concept of “<a href="https://racetozero.unfccc.int/wp-content/uploads/2021/04/Race-to-Zero-Lexicon.pdf">net zero</a>” – the point at which any remaining emissions of greenhouse gases are balanced with absorption, halting further warming of the climate. The necessity of reaching net zero emissions globally is <a href="https://eciu.net/analysis/briefings/net-zero/net-zero-why">abundantly proven in science</a>, and governments pledged in the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">2015 Paris Agreement</a> to achieve “a balance between anthropogenic emissions by sources and removals by sinks” in mid-century, in pursuit of holding global warming to 1.5℃.
This language was included in the Paris Agreement only because of <a href="https://www.climatechangenews.com/2019/09/16/net-zero-story-target-will-shape-future/">a determined push by activists</a> and vulnerable countries. And it’s hard to think of a more successful recent example of activists’ ideas changing the terms of debate. In two years, the number of nations, sub-national governments and corporates setting net zero targets has mushroomed, with coverage leaping from <a href="https://eciu.net/news-and-events/press-releases/2019/one-sixth-of-global-economy-under-net-zero-targets">16% of global GDP in June 2019</a> to <a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets">two-thirds now</a>. It is no exaggeration to say that net zero is now the defining lens through which many governments, businesses, NGOs and other types of entity view decarbonisation.
However, activists are not universally celebrating. Many have reacted by pointing out the flaws in some net zero targets, with <a href="https://www.foei.org/resources/publications/chasing-carbon-unicorns-carbon-markets-net-zero-report">particular fire</a> turned on oil and gas companies that plan to pay for <a href="https://theconversation.com/net-zero-emissions-targets-are-everywhere-we-need-to-sort-the-genuine-from-the-greenwash-150127">offsets</a> in place of dealing with the emissions caused by burning their product.
In some cases, concerns about the implementation of net zero targets turn into criticism of the concept itself. Recently three climate change academics including former IPCC chair Bob Watson <a href="https://theconversation.com/climate-scientists-concept-of-net-zero-is-a-dangerous-trap-157368">described net zero as a “fantasy”</a> and a “trap”, while Greta Thunberg <a href="https://twitter.com/GretaThunberg/status/1386290077379268613?s=20">said that</a> “these distant targets” are about “making it seem like we’re acting without having to change”.
<h2>Net zero commitments: a mixed picture</h2>
To be credible, an entity proclaiming a net zero target should have certain measures of robustness in place: at the very least, a high-level commitment, a published plan, immediate emission-cutting measures and an annual reporting mechanism. It must ensure that all its attributable emissions are covered, and that any “netting” uses high-quality, verified and permanent removals.
In March 2021 we were among researchers publishing <a href="https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets">the first analysis</a> of the robustness of net zero commitments made across 4,000+ national and sub-national governments and companies, accounting for 80% of global emissions. We found the picture is mixed: while most entities with a net zero target do have some robustness measures in place such as interim targets (60%) and a reporting mechanism (62%), others do not. The picture on offsets (paying for carbon credits from actions elsewhere) is particularly concerning, with only 23% of entities either ruling them out or putting restrictions on their use.
Does this mean that the concept of net zero as a defining frame for decarbonisation is itself a fantasy? We would argue that it absolutely does not.
The rapidly growing suite of net zero pledges comes with a coherent theory of change. Firstly, if an entity is serious, it will follow its pledge by putting robust measures in place, beginning with immediate actions to cut emissions: not doing so will quickly open up the entity in question to accusations that it is not serious.
Secondly, pledging a target means that the entity can be held to account by voters, shareholders or customers. Thirdly, to demonstrate credibility it may have to apply for accreditation from an impartial mechanism such as the <a href="https://sciencebasedtargets.org/">science-based targets initiative</a>, which can validate whether its plan is realistic.
Fourthly, such accreditation mechanisms evolve over time to follow the science. For example, the UN-backed <a href="https://unfccc.int/climate-action/race-to-zero-campaign#eq-4">Race to Zero</a> recently published <a href="https://racetozero.unfccc.int/the-race-to-zero-strengthens-and-clarifies-campaign-criteria/">upgraded criteria</a> (in which we were involved); further annual strengthening awaits.
Each of these four steps makes the commitment more concrete – and if it is not serious, exposes that clearly.
<h2>Signs that net zero targets lead to stronger action</h2>
There are early indications that this is more than a theory. The <a href="https://www.gov.uk/government/news/uk-enshrines-new-target-in-law-to-slash-emissions-by-78-by-2035">UK</a>, <a href="https://www.bbc.com/news/world-europe-55273004">EU</a> and <a href="https://www.npr.org/2021/04/22/988051091/biden-makes-new-pledge-for-u-s-greenhouse-gas-emissions-a-50-cut?t=1619973662789">US</a> all recently set 2050 net zero targets and then upgraded their 2030 targets to make them commensurate.
In Germany, the constitutional court <a href="https://www.npr.org/2021/04/29/992073429/german-court-orders-revisions-to-climate-law-citing-major-burdens-on-youth?t=1620225967941">has just ordered</a> the government to increase its near-term action to ensure that the costs of meeting net zero do not fall disproportionately on future generations. <a href="https://twitter.com/stv_smth/status/1386664915746893825?s=20">A survey</a> of the new Nationally Determined Contributions (NDCs) that nations are due to submit before the next UN climate summit, COP26, shows that 32 of the 101 countries with net zero targets have enhanced their NDC, compared with 11 of 90 countries without a net zero target.
Climate advocates are right to highlight the loose nature of some pledges, particularly from fossil fuel corporates. Such scrutiny is necessary to protect the science from greenwash. As Thunberg <a href="https://twitter.com/GretaThunberg/status/1387066094863650818">subsequently tweeted</a>, “the problem is of course not the net zero targets themselves, but that they’re being used as excuses to postpone real action”.
This is a real danger. If we allow disingenuous uses of net zero to discredit the concept as a whole, we risk giving up the hard-won gains secured by activists and vulnerable countries in Paris in 2015.
Rather than tarring all net zero pledges with the same critical brush, we would advocate differentiating serious targets from those set for <a href="https://theconversation.com/net-zero-emissions-targets-are-everywhere-we-need-to-sort-the-genuine-from-the-greenwash-150127">greenwashing</a>. Not all entities will embark on their journey to net zero with a fully fledged plan, but they should quickly clarify how they will reach their target: those that do so deserve plaudits if their plans are robust and viable, while those with unviable or absent plans deserve criticism.
Despite the imperfections, widespread strengthening of net zero targets, specifically to generate steep emission cuts in the next decade, offers the most viable route to implementing the Paris Agreement and so preventing the most dangerous impacts of climate change. We should get net zero right – not get rid.

The origins of net zero and its role as the defining lens through which governments, businesses, NGOs and other entities are implementing decarbonisation.

Net zero: despite the greenwash, it’s vital for tackling climate change

By the University of Oxford's Steve Smith and Thomas Hale, and the Energy and Climate Intelligence Unit's Richard Black and John Lang.

Saturday’s <a href="https://www.climateambitionsummit2020.org/">Climate Ambition Summit</a> saw countries <a href="https://www.climatechangenews.com/2020/12/12/live-world-leaders-upgrade-climate-commitments-paris-anniversary-summit/">making various kinds of pledge</a> to accelerate emission-cutting: ending use of fossil fuels (Barbados), putting an end to new coal-fired power station building (Pakistan), making deeper reductions over the next decade (Colombia, Rwanda)… and setting a net zero emissions target (Kazakhstan). 
Welcome, Kazakhstan, to the club of net zero nations, states and regions, cities and companies – a club that now has thousands of members, and which is actively recruiting still more, not least through the <a href="https://unfccc.int/climate-action/race-to-zero-campaign">Race to Zero</a>, launched earlier this year by the UN and the High-Level Champions for COP26. 
‘Net zero’ is now such an integral part of the climate change landscape that between two-thirds and four-fifths of global GDP is covered by such targets. That figure might seem a bit vague (more on that later) – but whatever the number, it is certainly a massive shift from the situation just 18 months ago, when ECIU published what we think was <a href="https://eciu.net/news-and-events/press-releases/2019/one-sixth-of-global-economy-under-net-zero-targets">the first analysis</a> of the issue. Then, as governments were assembled for the annual ‘intersessional’ meeting of the UN climate convention, the figure was one-sixth of global GDP.
Net zero burst out of its infancy, strode through its teens in a matter of months and is now a respectable, established figure of median age.
Offsetting action
Not everyone is enamoured of the net zero concept. On the eve of Saturday’s summit <a href="https://www.climatechangenews.com/2020/12/11/10-myths-net-zero-targets-carbon-offsetting-busted/">a group of scientists declared</a> that it is ‘founded on a number of myths,’ and ‘net zero targets several decades into the future shift our focus away from the immediate and unprecedented emission reductions needed.’
The particular focus of their criticism was offsetting, the practice of buying emission credits – usually by implication in a developing nation, and often through planting trees. But other criticisms are also very real:
<ul><li>A net zero pledge is just that – a pledge – and a pledge doesn’t cut a single tonne of emissions. Unless it is complemented by a plan and concrete measures to get on the path to net zero, how can anyone be confident that the pledge is not just spin?</li><li>Many net zero pledges lack any commitment to reporting progress, or any mechanism by which citizens or (in the case of corporations) shareholders can demand progress</li><li>Many are unclear in exactly what they are promising – whether they refer to all emissions or carbon dioxide only, on the target date, whether they include international aviation and shipping (countries), and which business activities are covered (companies).</li></ul>
The importance of these questions grows with the number of net zero pledges. And when you have as much as four-fifths of the global economy covered, they become extremely important indeed.
The integrity question
For the UK Presidency of COP26, 2020 started with repeated calls for more net zero commitments. If that was a top priority then, it may be less so now: with such a huge slice of global emissions covered by these pledges, there may well be more real emissions cuts to be gained through ensuring all existing pledges are implemented than by securing more pledges. 
It is only appropriate for ECIU, then, that as the entity that started tracking net zero pledges, we now turn our attention to assessing the integrity of net zero targets and tracking how that changes.

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But this is a huge task; and the tracking of pledges does not look like going away either, with more and more entities, particularly in the corporate sector, showing an active interest.
Oxford University has an interest in this area already, having led the consultation process that led to the <a href="https://4bafc222-18ee-4db3-b866-67628513159f.filesusr.com/ugd/6d11e7_347e267a4a794cd586b1420404e11a57.pdf">‘starting line criteria’</a> for entry into the Race to Zero. Hence our decision to join forces for the next phase.
Behind the scenes, supported by a number of colleagues and at times by a small army of student volunteers, we have embarked on the task of categorising the net zero pledges that matter most. To be precise – and in case you think we’re overstating the scale of interest in net zero – the 4,000 that matter most.
Early next year we aim to reveal the first analysis from our collaboration; and while the headline numbers on the share of global emissions, population and GDP look as impressive as you would think, the picture beneath the hood is far from rosy, with a minority of the commitments demonstrating a serious degree of integrity. We believe that going into this detail will promote more informed scrutiny of net zero pledges and, we hope, an improvement in their quality.
In the process we’ll be switching our central GDP measure <a href="http://statisticstimes.com/economy/gdp-nominal-vs-gdp-ppp.php">from ‘nominal’ to ‘purchasing power parity’</a>. It makes a bigger difference to the outcomes than a non-economist might imagine – literally, from around four-fifths of global GDP being covered down to around two-thirds – but PPP is a more accurate measure of the balance of spending power between citizens of various countries, so that’s the measure we’re adopting.
Delivering Paris
Science, through the Intergovernmental Panel on Climate Change (IPCC), <a href="https://eciu.net/analysis/briefings/net-zero/net-zero-why">shows us</a> that bringing net carbon dioxide emissions to zero globally around mid-century is key if we are to stand a 50:50 chance of keeping global warming to 1.5°C and so prevent the worst of its impacts. The spate of recent net zero commitments shows that at some level, this is widely understood and that many entities see the value of committing publicly to ‘doing their bit’.
However, far fewer are committed either publicly or privately to the other key part of <a href="https://www.ipcc.ch/sr15/chapter/spm/">the IPCC’s 1.5ºC formula</a>: cutting CO2 emissions by 45% from 2010 levels by 2030 (roughly halving them over the coming decade).

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The lack of ambition on this measure is not only crucial for climate change, it’s also a logical fallacy – because without substantial emission cuts over the next decade, nations, states, cities and companies will find it far harder to reach their declared net zero targets. Tracking integrity will thus also help those entities making a serious pledge.
As a concept, ‘net zero’ has been a huge success. It’s conceptually simple, it’s caught the imagination of political and business leaders alike, and it’s a necessary part of halting climate change. But so is short-term action; and so is a mechanism to deliver those pledges.
Net zero discourse now has to change from ‘tell us’ to ‘show us’ if confidence in the concept is to be maintained and the Paris Agreement goals to remain realisable.
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<a href="https://www.smithschool.ox.ac.uk/people/ssmith.html">Dr Steve Smith</a> is Project Manager of the Greenhouse Gas Removal Project at the Smith School, Oxford University
<a href="https://www.bsg.ox.ac.uk/people/thomas-hale">Dr Tom Hale</a> is Professor in Public Policy at the Blavatnik School of Government, Oxford University
<a href="https://twitter.com/johnlangab" target="_blank" rel="noreferrer noopener">John Lang</a> is Net Zero Tracker project lead at the Energy and Climate Intelligence Unit
<a href="https://twitter.com/_richardblack" target="_blank" rel="noreferrer noopener">Richard Black</a> is a Senior Associate at the Energy and Climate Intelligence Unit

With so much of the world now covered by net zero pledges, it's time to change the focus to delivery.

Net zero: from ‘tell us’ to ‘show us’

<title>Insights | Net Zero Tracker</title>

The Net Zero Tracker team's latest commentary and explainers on everything net zero.

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