Net Zero Integrity Assessment

Since the Paris Agreement there has been a groundswell of voluntary net zero commitments by nations and non-state actors. Voluntary pledges now cover over 90% of the global economy. However, most of the voluntary commitments made by businesses fall short of emerging global best practice. Despite the large number of net zero pledges being made, it is becoming clear that voluntary action alone is not enough to drive business climate action at the speed required to align with the science of limiting warming to 1.5 degrees.

In the context of an increasing number of Australian companies making net zero pledges, and with growing stakeholder and regulator scrutiny, Climate Integrity commissioned the UTS Institute for Sustainable Futures (ISF) to assess the net zero pledges of a sample of major Australian listed corporate businesses.

In March 2022, the United Nations established a High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities (UN HLEG) to develop clearer and stronger standards for net-zero emissions pledges by businesses, investors and cities. At COP27, this Expert Group released a report, Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions, with ten recommendations for what credible net zero pledges should include.

The ISF project team developed the UN HLEG checklist criteria into an assessment framework and assessed the publicly available transition plan disclosures of a sample of companies for alignment with the criteria. Additionally, we assessed company progress against their emissions reduction targets and alignment of their interim targets to a science-based decarbonisation pathway.

The company assessments undertaken found all ten companies to be lagging behind global best practice, with net zero pledges that largely lack scientific rigour. Despite a majority of companies assessed having a public net zero pledge or transition plan, no company has a fully comprehensive, quantified, capital-allocated and independently verified plan for reducing emissions in line with a scientific pathway. Analysis of emissions reductions achieved to date suggests that less than half are fully on track to meet their own targets.

Based on the findings, the report calls for improved business transition planning, including prioritisation of additional regulatory requirements, such as alignment with clear and enforceable integrity standards in the near-term. New regulatory requirements must be supported by robust disclosure frameworks, transparent sharing of information, and well-resourced regulators and verification mechanisms to achieve the outcome of driving business climate action in line with the science.

RESEARCH OUTPUTS

Net Zero Integrity Assessment of the Net Zero Pledges of Australian Companies (2024) (Report)

MEDIA

Net Zero Integrity Assessment (2024) (Media Release)

Ten of Australia’s top companies lack clear plans to stop using or supporting fossil fuels, report says (2024) (Media)