Prior to the event, COP27 was labeled our last shot to stop climate change from accelerating beyond control, and stakeholders hoped it would result in the much-needed shift towards more concrete action from policy makers – and away from pledges alone.
Although the creation of the Loss and Damage fund – meant to support and compensate developing nations, particularly those vulnerable to adverse impacts from the climate crisis – marked a breakthrough for climate accountability and justice, the final negotiations have been heavily criticized for failing to commit to phasing out fossil fuels and, ultimately, being “completely devoid of reality.“
But thankfully, COP27 didn’t leave us completely without hope. Where politicians failed to agree, the private sector stepped up, demonstrating the commitments and ambitious actions needed to reach the net zero targets we drastically need.
What you need to know after COP27:
- Zero tolerance for net-zero greenwashing in the future
- Aligning net-zero commitments to science-based targets will no longer be an option, but a requirement
- The private sector is taking the lead – all businesses, big and small, have no option but to jump on the bandwagon to ensure they stay relevant in the future
More tools and guidance for companies to reach net zero
Although the target of limiting global warming to 1.5°C barely made it into the final COP27 agreement, COP27 clearly signaled a newfound zero-tolerance policy for net-zero greenwashing claims going forward. But this year around, the heavy toll on action to reach net zero came from non-state entities.
ISO launches Net Zero Guidelines to help entities reach net zero before 2050
During COP27, the International Organization for Standards (ISO) launched its Net Zero Guidelines, also known as IWA 42, as a tool to help businesses and policymakers streamline their work towards net zero for both their businesses and value chains.
The new Guidelines aim to set a common path for clarifying and defining net zero and differentiating between scope 1, 2, and 3 emissions, as well as providing actionable advice on how to get there as soon as possible – but by 2025 at the very latest.
The Guidelines are a must-see for any company serious about reaching its net-zero goals, and we’re looking forward to following how the Guidelines make their impact in the sustainability reporting landscape throughout the years to come. Read more about it and find the Guidelines here.
Tackling corporate net-zero greenwashing
From this point forward, companies must prove their net-zero claims and commitments with evidence, through actionable objectives and investments. This was the key message from the UN High-Level Expert Group on the Net Zero Emission Commitments of Non-State Entities as they presented their new report at COP27. The Secretary General explained the report as “a how-to guide to ensure credible, accountable net-zero pledges,” and the guide sets tight definitions for what it actually means to be net zero-aligned.
Some of the group’s key recommendations for entities announcing their net zero commitments include:
- A net-zero pledge requires not only long-term goals, but also five-year milestone targets, demonstrating immediate emissions reductions
- To limit warming to 1.5°C, targets must be aligned with IPCC or IEA net zero emissions modeled pathways
- Emission reduction targets must cover emissions across the entity’s entire value chain (scope 1, 2 and 3 emissions)
- Entities must annually report their progress( including greenhouse gas data) publicly and in detail
CEOs commit to work side-by-side with governments to cultivate the urgent net-zero transition
Over 100 CEOs and senior executives from some of the world’s largest multinational corporations – including Nestlé, Microsoft, and ING – signed an open letter recognizing their responsibility and role in the transition to net zero and expressing their willingness to get to work.
In the letter, they ask their peers in the private sector to join them in:
- Setting science-based targets in line with the Paris Agreement, with a clear roadmap that takes sector-specific pathways into account
- Collaborating within and across sectors and value chains to drive transparency, advocacy, and action in alliances and initiatives while working with major industry and trade associations to advance alignment with the Paris Agreement
- Contributing to the development of internationally harmonized reporting standards
Signers also recognized the urgent need to simplify the sustainability regulation landscape by harmonizing reporting and disclosure standards. In the letter, they call on the leading regulatory bodies, including the International Sustainability Standards Board (ISSB), the European Commission, the U.S. Securities and Exchange Commission (SEC), to “align their collective efforts to arrive at globally-aligned standards to accurately measure and compare progress against ambitious targets.”
Time for climate action now
Regardless if COP27 left you inspired or disappointed, consider it fuel for the urgent change that is needed. It’s now more important than ever for businesses to take the driver’s seat and bring urgent climate action. If you’re ready to level up your sustainability work, reach out and learn how you can maximize the benefits of reporting in Worldfavor.
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