Why we must give substance to corporate net-zero targets
Written by Kendrick Lebron on May 26, 2021
Sanda Ojiambo is CEO and Executive Director of the UN Global Compact
Houston, we have a problem. Too many companies are pledging they will eliminate their carbon emissions by 2050, without spelling out how they will get there. To the public, this smacks of greenwashing. It is also undermining trust in the many genuine efforts at decarbonization that are underway.
We urgently need more businesses to join the fight against climate change, but we need their pledges to be credible. Companies should not be making long-term promises without backing them up with short-term plans and actions. Otherwise these commitments will be empty and won’t lead to the transformation we need.
The United Nations warns that on our current trajectory, levels of planet-warming greenhouse gas emissions will have barely budged by 2030, when we need to slash them by almost 50 percent in the next decade to avoid irreversible and catastrophic climate change. Unless we start eliminating carbon emissions now, we might as well forget about 2050, when scientists say emissions of greenhouse gases must cease altogether.
Businesses need to draw up short-term plans to radically scale back their carbon emissions. Think of it as a cost-cutting plan to save the business from bankruptcy. Except that instead of bankruptcy, the cost of inaction will be potential annihilation. To continue with business as usual is to conspire to destroy wealth, rather than preserve and create it. Yet research from the New Climate Institute shows that only 8 percent of companies with net-zero targets also have interim targets.
The dearth of short-term climate plans is not entirely the fault of corporations. Many companies need guidance on the skills, processes, and data required to measure their carbon emissions and assess climate risks. To set a destination, you need to know your starting point. Which is why we need to give companies the tools they need to set measurable pathways to zero emissions.
Assessing your carbon footprint and setting science-based targets is a good place to start. These targets describe a company’s route to reducing greenhouse gas emissions. They are considered ‘science-based’ if they are in line with what climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well below that 2°C increase on pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
The UN Global Compact, the world’s largest corporate sustainability initiative, is launching a major education programme to help companies set science-based decarbonization targets and flesh out their climate goals.
Through the Global Compact Local Networks around the world, companies participating in the Climate Ambition Accelerator will gain access to best practices, peer-to-peer learning opportunities, capacity building sessions and on-demand training on how to manage their emissions and outline different strategies to meet ambitious climate goals.
Good for the planet, and profits
Science-based targets work. Collectively, 338 corporate pioneers with science-based targets have reduced their annual emissions by 25 percent between 2015 and 2019—equivalent to the annual emissions from 78 coal-fired power plants. But to achieve the transition to a net-zero future, we need far more companies to sign on to climate-based decarbonization targets, particularly those in heavy emitting sectors.
Speaking at the World Economic Forum in January, UN Secretary-General António Guterres said: “Every country, city, financial institution and company needs to adopt credible climate plans backed by intermediate goals for transitioning to net-zero emissions by 2050, and to take decisive action now to put themselves on the right path. Every sector must do its part, from aviation and agriculture to transport, shipping, and industry.”
Science-based decarbonization is at the core of credible net-zero strategies. Credibility comes with accountability. The UN Global Compact aims to give companies the tools and skills they need to be both credible and accountable, by putting them on a path to meaningful and profitable decarbonization.
Distant commitments and lofty intentions just won’t cut it anymore. Businesses must draw up decarbonization plans now, set ambitious, short-term science-based targets, and report on their progress. The UN Global Compact is here to help them do it.