Only Transformative Net-Zero Implementation Will Meet Our Climate Crisis

Authors

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  David Wei

  Managing Director, Climate and Nature, BSR

  

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  David Wei

  Managing Director, Climate and Nature, BSR

  

  New York

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  David works with companies to develop and implement credible environmental goals, manage climate and nature risks, integrate justice into environmental action, and incubate collaborations to build a net-zero economy. 

  He strives to maximize the impact of our applied research, collaborative initiatives, and work with individual companies. This often means innovating how companies credibly align with the Paris Agreement, adapt to inbound climate disclosure regulation, and take advantage of growing interest in science-based nature goals. David also directs BSR’s Transform to Net Zero collaborative initiative. 

  Before joining BSR, David was a climate diplomat for the Marshall Islands with the advisory group Independent Diplomat and led on emissions reductions and transparency in the UN climate negotiations for the Alliance of Small Island States. As an international lawyer with the Foundation for International Environmental Law and Development, David built up the environmental treaty expertise of governments across the globe. He began his career as a securities litigator with Fried Frank in New York and a commercial litigator with Cassels Brock in Toronto, before focusing on climate change. 

  David holds a LLM in International Law from New York University, a JD and MA in International Relations from the University of Toronto, and a BA in Ethics, Politics, and Economics from Yale University.  

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The world’s leading authority on climate science, the Intergovernmental Panel on Climate Change, had not delivered a major report in 7 years. But the installment released last month paints a dire picture of our future. 

On our current path, we will likely breach the Paris Agreement’s stretch target of limiting global warming to 1.5°C above pre-industrial levels in the next two decades, and may breach the fallback target of well below 2°C around mid-century.¹ For these goals set just a few years ago, the 2020s will truly be the decisive decade. This year’s scourge of wildfires in California and Siberia, floods in Germany, and deadly storms like Hurricane Ida remind us of what is to come.

The IPCC report tells us that climate change isn’t a problem we should solve for the next generation; it is a problem we must solve immediately, for ourselves. The impacts of a 1.5°C and 2°C world – extreme heat and weather, species loss, crop yield reductions, fishery decline, disrupted supply chains, public health crises and displaced communities – would arrive during our own working lives. We, not our children, would see how the dice are loaded. The heatwave that happened once every 50 years before industrialization would happen 9 times at 1.5°C and 14 times at 2°C.²

So, the staggering rise of corporate net-zero commitments comes at an auspicious time. Over the past three years more than 3,000 businesses, large and small, have made net-zero commitments now aggregated under the UN’s Race to Zero campaign.³ All of these meet a set of criteria in force as of this June.⁴ This momentum from businesses to build net-zero value chains can change our global trajectory. But net-zero commitments are also increasingly subject to five criticisms which implementation must address to be truly credible and transformative.

1. The first criticism is that net-zero commitments divert attention from immediate abatement, effectively licensing short-term emissions. That is why companies with net-zero targets must also set and deliver an interim emissions reductions target following a 1.5°C trajectory, for example under the Science-Based Targets initiative, or as part of the Race to Zero campaign.⁵
2. A second criticism is that net-zero commitments, which are typically based on a company’s fair share of global net zero carbon dioxide by 2050, should not be inequitable as between developed and developing countries. That is why, companies whose emissions footprint sits largely in developed countries who have high historical emissions, should aim to achieve net zero ahead of 2050.
3. A third criticism is that net-zero commitments, by focusing attention on removals which net out emissions in the target year, divert attention from immediate climate investments outside the value chain needed to keep 1.5°C within reach. Companies can dramatically increase their impact on the climate crisis by not merely abating emissions in the value chain en route to net zero, but also compensating for emissions outside the value chain, for example by investing in climate solutions and methane reductions.
4. A fourth criticism is that net-zero commitments may greenwash business-as-usual action. Building a net-zero value chain requires genuine business transformation across functions, from supply chain engagement and procurement, to finance, and research and development and product design. Net zero implementation then must demonstrate business transformation across these functions, including integration into the company’s business strategy with a clear climate action plan which has been vetted and approved by shareholders.
5. Finally, a fifth criticism is that net-zero commitments perpetuate climate and environmental injustice, for example in BIPOC and low wealth communities. Here a company can support these communities through its net zero implementation. Renewable electricity can be purchased from companies with a proven track record of increasing energy access. Carbon credits can be selected which benefit these communities. Low-carbon products and services can be procured in a manner which improves the equitable distribution of benefits of the net zero economy. This is where net-zero implementation strategies intersect with equity in the sustainability agenda.

These criticisms point towards what climate leadership will look like in future. This includes: 

1. Selecting a net-zero target year earlier than 2050 if your footprint is largely in developed countries;
2. Setting and delivering an interim emission reduction target consistent with a 1.5°C trajectory;
3. Compensating for emissions outside the value chain enroute to your target year;
4. Implementing business transformation across functions; 
5. Supporting communities which have suffered from climate injustice through net zero implementation;
6. Using your company’s influence to advocate for policy which advances climate justice and which supports a just transition for all.

This can be a lot to ask of a company formulating its next climate target and implementation plan. But debate over net-zero commitments is heating up as COP26 approaches and will not slow down anytime soon. Listening to these concerns from the climate community helps companies to make their net-zero implementation commensurate to the crisis at hand.

¹ IPCC AR6 WGI SPM, table SPM.1.
² IPCC AR6 WGI SPM, p. SPM-23.
³ https://unfccc.int/climate-action/race-to-zero-campaign
⁴ https://racetozero.unfccc.int/wp-content/uploads/2021/04/Race-to-Zero-Criteria-2.0.pdf
⁵ The Race to Zero criteria require that companies “[s]et an interim target to achieve in the next decade, which reflects maximum effort toward or beyond a fair share of the 50% global reduction in CO2 by 2030 identified in the IPCC Special Report on Global Warming of 1.5C”.