To make net-zero claims, companies must stop investing in new fossil fuel generation, recommends UN-appointed task force
Companies must stop financing coal, oil and gas if their claims to be “net zero aligned” are anything other than greenwashing, a UN-appointed task force has said.
After months of consultations, the 16-member anti-money laundering group chaired by former Canadian environment minister Catherine McKenna has concluded that “net zero is totally incompatible with continued investment in fossil fuels.”
Thousands of large companies and cities have pledged to achieve net zero emissions by 2050, in line with the climate goals of the Paris Agreement.
“Too many of these net zero commitments amount to little more than empty slogans and hype,” McKenna said at a crowded launch event at Cop27 in Sharm el-Sheikh, Egypt. “You can’t be a net zero leader and still build or invest in fossil fuel supply.”
UN Secretary General António Guterres said he had “a message to fossil fuel companies and their financial enablers”.
“So-called ‘net zero commitments’ that exclude basic products and activities are poisoning our planet. They must thoroughly review their promises and align them with these new directions,” said António Guterres.
“Let’s say things as they are. It is reprehensible to use false promises of “net zero” to hide the massive expansion of fossil fuels. It is a deception. This toxic cover-up could push our world over the climate cliff. The fraud must stop.
Oil majors like Saudi Aramco, ExxonMobil, BP, Shell and Eni claim to align with net zero but continue to drill for more hydrocarbons.
A senior UN official said that “sometimes” net zero commitments by fossil fuel companies are “part of marketing efforts or communications efforts.” They added: “If you’re going to say that, you better make sure it’s true.
Stop funding fossils
Other than fossil fuel companies, the task force said anyone who invests in new fossil fuel production is not aligned with net zero. This includes cities, regions and finance companies.
It’s a stronger line than the UN’s Race to Zero, which says only that “corporations and investors must restrict the development, financing and facilitation of new fossil fuel assets.”
In June 2022, Race to Zero said it “does not include any new coal projects” without mentioning oil and gas. According to a legal opinion, this could expose members to competition lawsuits, it deleted even this website stipulation.
Krista Halttunen studies oil company strategies at Imperial College London. She said no fossil fuel company had agreed to stop investing in new fossil fuels, so none met the net zero criteria.
She told Climate Home that these guidelines “will be a good test. Which companies are ready to make the transition? »
In May 2021, the International Energy Agency found that no new fossil fuel project was compatible with limiting global warming to 1.5°C. A update to its net zero scenario by 2050 last month noted that reduced Russian oil and gas production could make room for limited infrastructure investment with a quick payback, but did not radically changed the situation.
In March 2022, the Science-Based Targets Initiative stopped accept climate commitments from fossil fuel companies for validation. A spokesperson said it was a temporary decision, while it works on criteria industry and scientists can agree to.
Limits of lobbying
The recommendations of the McKenna task force covered all companies, cities and regions. He said net zero plans should include interim targets every five years from 2025 and count emissions from the end use of products (scope 3). Companies should align their lobbying with climate commitments.
Halttunen said lobbying was particularly important. For example, Shell and BP are members of the American Petroleum Institute (API), which campaigns against climate policies in the United States.
Will Aitchison of InfluenceMap said it was a “watershed moment for corporate lobbying on climate policy, which has long hampered government action”.
“These recommendations break new ground by setting expectations not only for companies, but also for powerful third parties like industry associations,” he said.
The task force said carbon offsets should be of high quality and should only be used as a last resort, after a company’s own emissions have been reduced.