HLEG report puts the spotlight on non-state actors

In a stern assessment at COP27 last week, the UN's High Level Expert Group (HLEG) recommended that net zero not be undercut by exaggerated claims and "greenwashing" as well as presenting means of promoting climate action. The HLEG outlined ten proposals and five guiding principles for non-state actors to consider while contributing to the international effort to address the climate issue. In the 25 largest emitting regions, data from Oxford's Net Zero Tracker, which is co-led by Oxford Net Zero, reveals that 60% of businesses and more than 80% of cities and regions still do not have a net zero aim. Oxford academic Dr Jessica Omukuti, a member of the HLEG and research fellow on Inclusive Net Zero for Oxford’s Net Zero initiative, commented on how she welcomed the report.

‘The HLEG recommendations link equity and justice to the determination of credibility of net zero commitment, for instance, by encouraging large corporations to set targets and implement measures that are in line with their fair share of emissions and demanding that net zero strategies respect human rights, invest in nature restoration and protect local and indigenous communities.’[i]

Source: UN

The report outlined the following key themes in its recommendations:

• Incrementality- A net zero promise must include stepping stone goals for every five years and lay out specific steps to get there in accordance with net zero greenhouse gas (GHG) emissions modelled pathways that keep global warming to 1.5°C with no or little overshoot, as determined by the Intergovernmental Panel on Climate Change (IPCC) or International Energy Agency (IEA). A city, state, or company's whole value chain, including end-use emissions, must be covered by the plan. In light of the need that global emissions must decrease by at least 50% by 2030, it must get going quickly and avoid waiting until the very last minute to act.
• Offsets should support developing nations- Non-state actors should avoid the use of cheap carbon credits before looking at reduction potentials. As high-integrity credits become more accessible, these should be utilised to introduce financial flows into underinvested areas to enable the decarbonisation of developing nations.
• Transparency - Non-state actors must publicly disclose their comprehensive plans for achieving net zero transition, outlining how they will meet all goals, align governance and incentive structures, finance capital projects, conduct research and development, develop human resource skills, and advocate for a just transition.[ii]

The HLEG called on regulators, policymakers, company owners, cities, and financial institutions to work towards the findings of their research and incorporate its conclusions into current efforts as well as emerging and future ones. At the completion of their work, a list of recommendations for projects, businesses and regulators was provided. Some of these recommendations are outlined below:

• With a focus on their intermediate aims, how they set targets, and how they report progress, non-state actors should assess how their net zero pledges compare to the themes outlined in the HLEG report. Alliances of existing non-state actors should assist their members in these reviews by swiftly revising their membership guidelines to reflect these recommendations.
• Small and medium-sized firms (SMEs) and micro enterprises should receive support from non-state players in their attempts to go green and reduce their carbon footprints. They are essential to achieving net zero goals because they are a component of the value chains of larger entities, and they contribute to scope 3 emissions. Small and micro enterprises will need assistance from larger organisations with data collecting, capacity building, and generating and sharing necessary technology as they face pressure to transform themselves to keep clients and obtain financing.
• Key current rules that direct non-state entities working on net zero should incorporate the HLEG's proposals, according to regulators and policymakers. This will increase the transparency and clarity of the minimal standards.[iii]

Implementing the HLEG’s recommendations

Incrementality

In order for non-state actors to provide regular updates and milestones within their net zero plans, measuring carbon impact must be robust and accessible. In England, the Local Government Association represents 331 of 333 councils across the country; this leaves them well placed to support the recommendations of the HLEG in terms of supporting smaller enterprises as well as building policy that reflects the findings of the UN report.[iv] In terms of supporting a robust and accessible measurement tool for carbon impact, the LGA provide a case study of a partnership between Cambridgeshire County Council and University College London. The partnership worked to provide two tools, a code of practice and a carbon calculator; the use of the tools facilitated comprehension of the difficulties and problems suppliers have in delivering carbon reductions. The ability for smaller suppliers or on smaller contracts is a major issue for many of these issues, which will assist in outlining how we approach implementation in the future. Further discussions with suppliers about their capacity and the effects of such requirements were also sparked by this.[v]

Offsets should support developing nations

John Kerry, the U.S. climate envoy, presented a carbon offset scheme in the wake of the COP27 world leaders summit that would let businesses support renewable energy initiatives in developing nations that are having difficulty switching away from fossil fuels. The Energy Transition Accelerator programme, which will be completed over the next year, is a collaboration with charitable organisations, including the Rockefeller Foundation and the Bezos Earth Fund. According to officials, the private sector could invest billions of dollars in the economies of developing nations attempting to switch to renewable energy sources like wind or solar. According to a draft of the plan, companies that want to participate in the new programme must agree to attain net-zero emissions by 2050 and submit annual reports on emissions and advancement toward the goal. Companies that use fossil fuels are likewise prohibited from participating in the programme.[vi] This shows that the plan suits the recommendation of the UN that regulators must support the findings of the HLEG.

Transparency

With goals set at 1.5 degrees, more than 7,000 businesses from around the globe have joined the Race to Zero Campaign. However, due to variations in techniques, definitions, coverage bounds, and instruments used to account for emission reductions, there is a significant range in the robustness of corporate promises. To make sure that pledges are followed by concrete actions, there must be greater transparency regarding corporate climate action, with data that is clear, accessible, and comparable. A uniform verification process for net-zero pledges, according to the UN High-Level Expert Group on Net Zero Commitments, can reduce obstacles to quicker progress and foster an "ambition loop" among businesses. Although it is still in its early phases, the Net Zero Data Public Utility programme is a step in the right direction. Transparency on the transition of heavy industries to net-zero is hampered by differences in processes, complexity in supply chains, ambiguity regarding the definitions and thresholds of net-zero products, and a variety of disclosure frameworks between the energy, materials, and infrastructure sectors which together account for about 30% of global emissions. The Net-Zero Industry Tracker, a project of the World Economic Forum in partnership with Accenture, aims to close this gap with a comprehensive framework that is standardised and uniform in its methodologies, targets, and definitions. It also supports the identification of particular enablers that need to be addressed in order to speed up the decarbonisation of these sectors. The first step in developing effective plans, building trust among stakeholders, and facilitating best practice sharing on the path to net zero, is having access to complete, timely, comparable, and robust information. A data governance framework, universal guidelines for data reporting at all levels, funding for capacity training in transparency, particularly in developing nations, and the use of cutting-edge technologies can all aid in closing the data gap.[vii]

References

[i] Oxford University- UN report calls for non-state emissions action: as new data shows 60% of top businesses have no net zero target

[ii] United Nations’ High‑Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities- Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions

[iii] Ibid

[iv] LGA- Who we are and what we do

[v] LGA- Cambridgeshire County Council and University College London: Procurement tools to measure and reduce carbon emissions

[vi] CSNBC- U.S. launches carbon offset program to help developing countries speed clean energy transition

[vii] WEF- Why the net-zero transition needs a transparency boost

‍