By Sharon Atieno
Though there is recommendable progress on the internationally agreed-upon policy to strike a balance between production and removal of greenhouse gases from the atmosphere (net zero policy), it is not enough to meet the 1.5°c goal of the Paris Agreement.
This is according to a report “Net Zero Policy Matters: Assessing Progress and Taking Stock of Corporate and Financial Net Zero Policy,” released by the Taskforce on Net Zero Policy during the 29th Conference of Parties (COP 29) on Climate Change in Baku, Azbeirjan.
The Taskforce’s research assessed more than 1,000 policy instruments across the G20 -an intergovernmental forum comprising 19 States, the European Union (EU) and the African Union (AU). It is among the first reports of its kind to comprehensively assess the global policy environment at scale.
The report found that policy formation is more widespread than may have previously been expected. For instance, all G20 countries have some form of policies that support the transition of non-state actors (NSAs) to net zero. Also, the number of NSA focused policies has tripled since 2020.
It also found increasing examples of real economy policies that place requirements or obligations on companies and financial institutions to act on net zero, often in emerging markets, such as in South Africa. Examples include policies related to fossil fuels and renewable energy, land use and deforestation.
Furthermore, efforts on implementing actionable sustainable finance measures, like taxonomies and transition plans, has advanced around the globe, with the EU moving most quickly. However, other countries are also making progress —and adding their own priorities for the transition to climate goals.
Brazil, Indonesia and Mexico, for example, have made efforts to expand the focus of their taxonomies to include issues such as land use, social goals, and gender equality issues, demonstrating engagement with wider sustainability issues related to the transition, the report notes.
Policy reforms not sufficient to meet Paris Goal
However, the overall progress of policy reforms remains insufficient to align the activities of large corporates with a 1.5°C goal. None of the nine United Nations (UN) High-Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities (HLEG) recommendations are fully reflected in policy frameworks across the G20. This shows a policy gap in ensuring the integrity of net zero action by NSAs.
The recommendations include setting interim targets, creating a transition plan, using independent verification, establishing clear standards and criteria to ensure that net-zero pledges align with limiting global temperature rise to 1.5°C above pre-industrial levels, increasing transparency and accountability, investing in just transitions, phasing out fossil fuels, considering people and nature, aligning lobbying and advocacy, and accelerating regulation.
The Taskforce also found that few corporate and financial policies clearly articulate a link to the 1.5°C limit. However, those that do, relate to risk-based scenario analysis frameworks, particularly in Australia and the UK.
The report also notes that issues around nature, adaptation and social objectives are increasingly being considered by policymakers, but they are not yet systematically addressed across net zero policies regulating companies and financial institutions. This is a weak spot that hampers effective action on these objectives.
Additionally, the Taskforce found that the implementation of the “Do No Significant Harm” principle- one that prioritizes the needs of vulnerable communities- is still largely missing from policies governing the activities of NSAs. The policy gap is exacerbated by the absence of an imperative highlighting the right to sustainable development for emerging and developing economies.
Acknowledging the progress made by G20 countries and the actions undertaken to ensure net zero becomes a core component of policy and regulatory formation, Taskforce Co-Chair Helena Vines Fiestas said, “There is no escaping the fact that the steps we’ve seen are not enough to align us with the goals of the Paris Climate Agreement. We’re already off track for 1.5°C and to have any hope of correcting our course, we need to see this policy gap closed.”
According to the HLEG Chair and Taskforce Board of Trustees member, Catherine McKenna, leaders have shown that regulating Net Zero commitments can be done; and in fact, many large companies are already preparing for mandatory disclosures. “It’s now time for all G20 countries to implement policies that ensure non-state actors have clear direction to move ahead with high-integrity Net Zero commitments,” McKenna urged.
Her Excellency Razan Khalifa Al Mubarak, UN Climate Change High-Level Champion for COP28, noted that reaching a nature-positive, net-zero future requires a whole-of-society approach, with an enabling policy environment that supports NSAs in leading climate action.
“At the heart of the Race to Zero emission is the need to pivot from voluntary action to rules and regulations that deliver a just transition, protect and restore nature, and benefit women, girls, and Indigenous Peoples. As this report by the task force shows, momentum is underway; yet more action is needed to fully establish this enabling environment,” she said.
The Taskforce on Net Zero Policy was established at COP28 to further the aims of the HLEG. They were tasked to facilitate the HLEG’s recommendations to “accelerate the road to regulation.” It has three main duties including establishing a collaborative space that encourages the sharing of knowledge, practices, and insights among policymakers and regulators. They also provide research and technical support, particularly in policy areas that support the net zero transition in a way that is consistent with the HLEG recommendations and that also works for companies of all sizes and addresses the needs of middle and low-income and the most vulnerable countries. Additionally, they identify opportunities within regulatory frameworks that support the implementation of the HLEG recommendations.
