Global markets, shareholders and consumers are impelling corporates to announce climate action and net zero policies across the globe. This movement has resulted in a rush of company directors announcing net zero pledges without fully examining their capacity and ability to meet their goals.
Renew Economy stressed that failures to meet these goals, could be considered “guilty or misleading conduct”, resulting in legal or regulatory penalties. The long timeframe to achieve net zero goals and the current lack of clear, unified regulatory approach, may have set a false sense of ease. In March, The Conversation among other researchers published the first analysis of net zero commitments of 4,000+ sub-national governments and companies which account for 80% of global emissions. The study highlighted that only 60% of plans announced interim targets and 62% of the corporates announced reporting mechanisms.
If corporates are serious with their net zero intent, it will be met with robust measures in place and pledging a target which can be held accountable by shareholders and consumers. Credibility should be demonstrated by accreditations from impartial mechanisms such as a science-based target, which will validate whether the plan is credible. Last week Australia Post and Newcastle Port have become the latest Australian organisation to have their emissions targets recognised by the Science-Based Targets program, validating both the corporates’ efforts to limit temperature rise “well below two degrees”.
Net zero targets are statements of corporate intent, and should not be made unless research has been undertaken to ensure they are deliverable. Corporates are encouraged to seek advice and support regarding this. Goals should be genuine, and importantly realistic in their approach to reach net zero.