The UN is planning to set up a body to scrutinise Net Zero pledges from the private sector, after Secretary General Antonio Guterres accused the current commitments of suffering from “a deficit of credibility and a surplus of confusion”.
Speaking at COP26 yesterday, Guterres said there were “different meanings and different metrics” attached to the numerous decarbonisation targets, prompting him to “establish a group of experts to propose clear standards to measure and analyze net-zero commitments from non-state actors”.
Speaking more broadly, he claimed that “recent climate action announcements might give the impression that we are on track to turn things around. This is an illusion… Even if the recent pledges were clear and credible – and there are serious questions about some of them – we are still careening towards climate catastrophe”.
The comments came on the same day that the Net Zero Asset Managers Initiative claimed that a third of its members’ assets are already being run in line with Net Zero by 2050.
The findings were published in a progress report from the group of 43 investment managers. A spokesperson for NZAM initiative told RI that “managing in line with net zero means that the assets are aligned with achieving net zero by 2050, and are also subject to shorter term (2030 or sooner) targets for a fair share of emissions reduction rather than just the long term 2050 net zero ambition.”
The report said that the “absence of methodologies for accounting for certain types of asset, or measuring alignment to net zero” was a major challenge for members.
“Several managers noted that this was the case for derivatives, cash, private equity, green bonds, sovereign bonds, covered bonds and structured products among others,” it explained, adding that it was working with partners to “allow a broader range of asset classes to be included in the near future”.
A further 92 asset managers, representing a combined $10.8trn, joined NZAM at the report’s launch.
The announcement of a new UN-convened group to scrutinise Net Zero commitments came hot on the heels of recommendations from the finance-focused arm of the UN’s Environment Programme, UNEP FI, on how financial institutions should ensure they make “credible, transparent and comparable 1.5°C science-based” commitments.
The 11 recommendations include halting the financing of any new fossil fuel developments, establishing 5-year targets, addressing Scope 3 emissions and financing emerging climate technologies.
It is unclear whether the new group will be mandated to take forward those recommendations, which were part of an input paper into the development of a G20 Sustainable Finance Roadmap. UNEP FI could not be reached for comment.