Net zero is set to become a major reputational issue come November

By Andrew Adie

Climate Action 100+, the investor engagement group, yesterday published its second company benchmark assessment showing the number of organisations committing to net zero by 2050, and the progress they are making towards those targets.

The conclusion could be rather bluntly defined as a lot of promise, not enough action.

In fairness, for many organisations achieving net zero isn’t an easy task. There are low hanging fruits (such as introducing energy efficiency measures,  switching to renewable tariffs) but we won’t get to net zero by 2050 by doing the simple things. Business has to fundamentally re-shape how it operates from energy use to raw materials, from waste and recycling to the huge challenge of addressing Scope 3 emissions (those arising indirectly from the use of the products and services the business produces).

However, it still doesn’t get away from the harsh reality that committing to net zero by 2050 is not the same as delivering a science-based roadmap that gets you there. Which is where many of the accusations of greenwashing are based from.

The launch of the report has gained media headlines and some embarrassed shuffling in boardrooms but it has far wider implications.

It shines a light on an area of significant reputational risk for the corporate (and political) worlds that is rapidly becoming a powder keg set to blow in November at COP27.

The ongoing horror of the war in Ukraine, the impact of sanctions on Russia, the need to boost energy security and control soaring energy prices, all play into an agenda that is seeing net zero by 2050 targets called into question.

Nigel Farage is mounting a campaign to have a referendum on net zero (that old chestnut), Steve Baker MP has launched the Net Zero Scrutiny Group which is similarly pressurising the Government on the cost and impact of achieving net zero and there are reportedly significant differences of opinion on net zero between Number 10 and Number 11 Downing Street.

Yet the UK is legally committed to delivering net zero by 2050 and as the recent IPCC report illustrated, the impact of failing to keep global warming to Paris targets of 1.5C are significant (for humans, wildlife and the planet).

Which brings us back to COP27 in November.

The spotlight of the world has understandably swung to Ukraine and to geopolitics. It’s also swung to the cost of living crisis and rising global energy and commodity costs that are in part a result of that war, the impact of the fighting on Ukraine and the sanctions imposed on Russia.

Yet net zero hasn’t gone away. The planet continues to warm, extreme weather continues to build, stress on human life, communities and biodiversity gets greater.

Come November 2022 the likelihood is that very little progress will have been made on the targets agreed at COP26. Countries are meant to be coming to Egypt with a view on how the keep ‘1.5 Alive’ yet the war, geopolitical tensions, economic stress all provide a smokescreen for the world to claim that progress to net zero had to be paused.

That will make the environmental community and activists very angry. It will also make many developing nations who will be disproportionately affected by change very angry.

Egypt has said that it will not allow protests and activism on the streets in the way that they took place at COP26 in Glasgow. Those activists and protesters aren’t going to go away, they’re going to go elsewhere.

They will likely come to the streets of London, Paris, Frankfurt and New York; they will likely take to social media; they will likely target multinational companies and others that are not felt to be pulling their weight on the promised transition to net zero.

They are also going to have to make their protests and their voices heard by a global audience that is focused elsewhere and with the COP27 diplomats and negotiators based in Egypt.                    

Those businesses that are highlighted in the Climate Action 100+ report as not delivering expected progress on their journeys to net zero will be among those that need to be concerned, but they will not be alone.

Net zero isn’t just a slogan, it’s a legal obligation (in the UK) and a measure of ethical and environmental intent. It’s not the only measure but in a world where the environmental movement is losing momentum, it’s a measurement that could well be a litmus test of activists and NGOs who will want to get that net zero mission back on track come November.